If you register vacant rooms in your house to an online lodging reservation site and lodge travelers in such rooms, would it be a violation against the Hotel Business Law?
According to an article in the Nikkei Shinbun Newspaper dated May 16, 2014, the Safety Division of the Metropolitan Police Department arrested an Englishman on the suspicion of violating the Hotel Business Law due to running a budget hotel for foreign travelers without permission.
According to the article, the Englishman started the budget hotel business at his three storied wooden house last November. He promoted the accommodation to guests using an online lodging reservation site and he charged 2500 yen - 5000 yen per night.
The Englishman was arrested due to the suspicion of having lodged 7 women from Thailand in March and April without the Hotel Business permission.
A public health center had warned and instructed the Englishman about ten times that his house was too small to lodge many guests and his lodging business was violating the Hotel Business Law. However, he insisted that his house was not a ryokan (hotel) but a share house. Therefore the Englishman might be arrested because he had run the lodging as "business" and he did not comply with the instruction from the public health center despite the repeated warnings, so he was judged as reprehensible.
However, is this kind of act violating the Hotel Business Law?
Under the Hotel Business Law, we should consider whether this kind of act corresponds to "Budget Hotel Business" or not.
If it corresponds to "Budget Hotel Business", we have to obtain a permission from a prefectural governor (Article 3 (1)). If we run a Hotel without permission, we shall be punished with imprisonment with work for no more than 6 months or a fine of no more than 3,000,000 yen.
Therefore, the space owner has to obtain a permission of "Budget Hotel Business" and as a prerequisite, the building should satisfy the requirements of the Building Standards Act and the Fire Service Act in order to be used as a hotel but not as his/her own house, which shall be used by an unspecified large number of people.
However, it might be really difficult to fulfill all these requirements, so it would be difficult in reality to obtain a permission of "Budget Hotel Business".
According to the Hotel Business Law, the Hotel Business means "the business in which we receive an accommodation charge from a guest and lodge a guest" and the lodging means "providing a guest room with bedclothes to a guest (Article 2 (6))".
The official public health center website says the following: As for the Article of "providing a guest room with bedclothes to a guest", it is not necessarily the case where the manager provides bedclothes, but those provided by themselves shall apply.
If so, when we lend rooms to guests similar to apartment management seems to fit in the Hotel Business, but the classification is described in the notification of Ministry of Land, Infrastructure (March 31, 1986/No.44) as follows:
"The business in which we lodge a guest" shall fulfill the following two conditions.
1. In view of facility management on the whole, a manager is in charge of the maintenance, management and improvement of facility sanitation including occupied guest rooms under the social standards
2. A guest shall not make a living in a guest room as a general rule.
Judging from these Articles, an online lodging reservation site shall gather guests by offering one night lodging with an accommodation charge and the owner shall provide a room with bedclothes to a guest. Moreover, the owner shall be in charge of maintenance, management and improvement of facility sanitation and in contract, guests shall use a guest room for the purpose of sightseeing so that they shall not make a living in the guest room. Therefore, this kind of business must be regarded as "the business in which we receive an accommodation charge from a guest and lodge a guest” and it complies with the Budget Hotel Business.
Therefore, if we use an online lodging reservation site and offer guests rooms to lodge them in our house without a permission, it is highly likely to be regarded as being illegal as prohibited by the Hotel Business Law.
However, I wonder if this conclusion would be okay.
Along with the development of the Internet, it became easier for us to offer our vacant rooms to travelers privately, and we could earn money and enjoy the communication with travelers.
Nevertheless, if we are judged as illegal by the outdated Hotel Business Law and arrested because we did not obtain a permission, I think it is quite out of date.
I think there is less necessity to provide high-level safety same as the Budget Hotel regulated in the Hotel Business Law (travelers may not expect such high-level safety.)
Needless to say, there are various cases such as an individual owner buying a large building or several houses and devoting himself/herself to the Hotel Business for foreigners, so it might be difficult to classify them.
However, I think the case of an individual owner providing guest rooms only for short stay should be judged as an exception of the Hotel Business Law, or deregulation shall be necessary.
What are your thoughts?