1. Does Japan Have a Yen for Airbnb?
Airbnb’s Impact on Japan’s Economy

2. Table of Contents
Introduction .......................................................................................................................... 3
Clicking to a Stronger Economy ........................................................................................... 3
Current Status of Japan’s Economy ..................................................................................... 5
Tourism’s Contribution to the Japanese Economy ............................................................... 6
Airbnb Corners the Market on Sharing ............................................................................... 8
Japan Clicks with Airbnb .................................................................................................... 10
Minpaku ............................................................................................................................... 14
Conclusion ............................................................................................................................ 14

3. Introduction
Since the early sixth century B.C., humans have embraced the fact that the world is shaped like a
sphere, but in the last two decades humans have re-examined the way they think about the globe (Strauss).
In this day and age, people tend to agree with Thomas Friedman’s concept of a world that is flat. It is not
believed to be physically flat. It is definitely still sphere-shaped, but the technological advances that have
been made in the last six hundred years have essentially redefined space and time for mankind.
In the early parts of human history, the world seemed enormously big and disjointed. The globe
felt so big that land masses separated by oceans were considered to be whole new worlds, and those who
ventured out in discovery of those new worlds were hailed as heroes. Names like Christopher Columbus,
Amerigo Vespucci, and Hernan Cortes ring familiar because they belong to men who dared to travel past
the confines of their normal surroundings. They were the first pioneers to use the latest technology available
to them to begin breaking down geographic, cultural, and technological barriers. It all started with ships.
Believe it or not, ships were the linchpin that began the flattening of the world.
The ships that carried Columbus and Vespucci to new lands may have started to flatten the world,
but numerous barriers still existed up until the early 2000s. With the dot com boom came an explosion that
destroyed many of those barriers. In the same way that ships gave individuals freedom to travel to and from
new places in the 1400s, the internet revolutionized the international travel industry. People used to employ
travel agents to plan their trips and make their reservations. Traveling was an ordeal and an extravagance.
It was reserved only for the people who could afford the time and money required to coordinate with a
travel agent, but the internet changed all of that. The development and popularity of the internet soon shifted
the paradigm of international travel. The internet took away the need for travelers to depend on travel
agents, because it gave each individual the ability to act as their own agent. It made travel affordable and
available to everyone. As a result, international travel has become mainstream. Travelers are able to
research a destination, review feedback given by fellow travelers, book a flight, make accommodations,
and take a virtual walk down a street in a foreign city using Google Earth. In essence, travelling across the
world has been reduced to a few clicks and a plane ride. Now, the world truly is flat.
Clicking to a Stronger Economy
The fact that the internet has made travel an attainable opportunity to every individual has
powerfully impacted many nations’ economies around the globe. Once isolated and dependent on
consumers within certain geographic and politial boundaries, economies have been transformed by
international travel. Boundaries are now easily crossed, and economies all over the world are benefitting

4. from the wealth of other nations, as people who make their money in one country are now able to easily
spend it in another. Japan’s economy, more specifically, has grown considerably as a result of international
travel. A recent editorial for The Japan Times stated, “It seems ironic that the sole bright spot in Japan’s
economy is inbound tourism, boosted by sharp increases in Chinese visitors on shopping sprees. The
number of visitors to Japan in the first 11 months of 2015 rose 47 percent over the same period of the
previous year, and the annual total is estimated to have topped a record 19 million. The figure is certain to
exceed 20 million for the first time this year and is expected to generate up to ¥5 trillion in fresh demand
and have major ripple effects across the country.”
Japan’s tourism industry may have the power to jumpstart its economy’s growth. The soaring
numbers of visitors coming into the country gives Japan the opportunity to capitalize on the marginal wealth
created in other countries (Exhibit B). However, there is one problem: Japan’s tourism industry is crippled
by a serious problem with accommodations. There are not enough hotels in metropolitan areas to support
the volume of visitors, but the internet coupled with the sharing economy may provide a possible solution.
Bloomberg’s Kathleen Chu and Katsuyo Kuwako state, “The hotel occupancy rate has risen to 70 percent
in Japan, the highest level since the Japan Tourism Agency started to gather the data in 2010. The occupancy
rate for hotels in Tokyo and Osaka reached 84 percent and 90 percent. More than 500,000 guests have
stayed in homes rented through Airbnb in Japan since 2010.”
Leveraging Airbnb properly could be a feasible solution to several of Japan’s economic problems.
Its online services and home-sharing methods have already begun to revolutionize Japan’s tourism industry,
and it has the potential to increase its impact on the entire economy in the long-run. While Japan’s supply
of lodging struggles to keep up with the growing demand from traveling tourists, Japan is Airbnb’s fastest
growing market (Mayger).
Despite the surge in tourism and the shortage of lodging, traditional hotels have felt threatened by
Airbnb’s success in Japan. They have placed pressure on the government, which has in turn responded to
those pressures, by releasing guidelines for home-sharing. These guidelines essentially make Airbnb’s
model for home-sharing illegal, leaving Airbnb in need of a legal workaround (Nakamura & Takahashi).
This move against the sharing economy could have unforeseen negative effects on Japan’s economy. Right
now, Japan’s economy is in flux. It is dependent on consumer and foreign spending, so policies or laws that
limit spending would be counterproductive to the government’s efforts to increase consumption. In order
to see this more clearly, one must take a more detailed look at the current state of the Japanese economy.

5. Current Status of Japan’s Economy
In 2012, the Japanese people elected Shinzo Abe to the position of Prime Minister. Since his
election, the term “Abenomics” has been coined and become recognized all over the world, because it refers
to the Prime Minister’s plan for
“unprecedented monetary
easing, government spending and
business deregulation” (Sharp). Abenomics
seemed to be working in 2013 as the yen’s
value fell against the dollar. According to
The Wall Street Journal staff, “the yen
slipped to its weakest level against the U.S.
dollar in nearly eight years.” This
devaluation of the yen attracted foreign
spending, trade, and investment, and it ultimately contributes to Abe’s plan to shock the Japanese economy
out of its twenty-year lull by reaching a 2 percent target inflation goal (Sharp).
Abenomics seemed to be working in the first couple of years of its implementation, but Japan’s
overall progress towards their economic goals seemed to stall in 2015 (Exhibit A). The yen began to
strengthen, and while inflation has increased in certain portions of the economy, the overall inflation rate
is well below the 2 percent target (Ip). The inflation rate is likely to hover around 0 to 1 percent unless the
Japanese government takes some intentional action. Specifically, the government needs to focus on
motivating the economy to raise real wages across the board. Given the fact that Abenomics depends on
Figure2
Figure 1

6. increased spending and investment, it is vital to put more money into people’s pockets. According to The
Wall Street Journal’s Greg Ip, “Low inflation is partly due to plunging oil prices. But more important is the
puzzling failure of wages to rise much despite the lowest unemployment in 19 years.” In other words, the
government must find a way to remove restraints on wages and perhaps even give the public and private
sectors a nudge in the right direction – up. The same is true with price controls. They need to be removed,
and the government needs to allow the market to
work out the wage versus price equilibrium. At this
point, the government is continuing their efforts to
stimulate the economy by implementing negative
interest rates. Negative interest rates are designed to
penalize excess saving by banks, inspire banks to
invest or pursue profit-making activities, and drive
foreign savings elsewhere (Randow & Kennedy).
Negative interest rates are a sign of desperation, and
they are ultimately a gamble. They could have the
desired effect on the economy, but they could also backfire and drive the investment rate down. Japan is
taking that risk. Regardless, the Japanese government is ready to intervene in the economy and tip the scales
in any way needed to achieve the desired result. In short, Japan’s economy is currently little more than a
petri dish. It is the testing ground for economic theories and the gambling table for players willing to take
risks. Is the Japanese leadership missing a key opportunity to encourage grassroots spending and profit-
making though? There is an opportunity right in policymakers’ backyards, and it has to do with tourism
and the sharing economy.
Tourism’s Contribution to the Japanese Economy
For many years, Japan has proven to be a destination that does not disappoint travelers. It has been the
focal point of worldwide attention in the past, and it will continue to attract global attention in years to
come.
• 1964 Summer Olympics
• 1972 Winter Olympics
• 1998 Winter Olympics
• 2002 FIFA World Cup (co-hosted with South Korea)
• 2019 Rugby World Cup
• 2020 Summer Olympics
Figure3

7. • 2022 FIFA World Cup (bid)
It is currently slated to host two major world events and has also bid on a third.
It is expected that these upcoming events will contribute greatly to Japan’s plan to stimulate its
economy. The Bank of Japan is forecasting a significant increase in GDP over the next few years, an
increase that is anticipated to be worth several trillion yen (Figure 4). In his article for The Japan Times,
Matsutani captures a piece of the swirling debate regarding the economic impact the 2020 Olympic games
will have on Japan. His article states, “The Institute for Urban Strategies said in January it estimates the
economic effects to be ¥19.4 trillion. “I think it’s a somewhat conservative number. The more factors
included in the estimate, the bigger the number,” Ichikawa said. While the Tokyo Metropolitan Government
announced the economic effects would be ¥3 trillion, Ichikawa’s institute factors in more items than the
government, which only considered effects directly related to the Olympics such as construction of the
facilities to be used by athletes and others involved in the Olympics and the operating costs of the Games.”
While the actual number has yet to be determined, it is clear that Japan’s economy will be benefit from the
Olympics. Not only will domestic consumption and investment increase, but foreigners from all over the
world will travel to Japan, stay in Japan, and spend money in Japan.
The Bank of Japan is not only certain that construction and increased infrastructure for these events
will contribute to increased GDP, but it is also depending on an increased number of foreign visitors to give
the economy a boost. Their Economic Impact of the Tokyo 2020 Olympic Games report released in January
stated, “The experience of previous host countries shows that the number of foreign visitors already starts
to climb from around the time when the host city is chosen rather than the year that the Games are held,
with increases typically outpacing the trend observed in the 10 years running up to the selection as host
Figure 4

8. country. Mizuho Research Institute [2014] highlights that Australia, for example, as a result of active
measures to attract visitors in the run-up to the Sydney Olympics, received 20 percent more foreign visitors
in the year that the Games were held (2000) than the trend prior to Sydney’s selection as the host city.
Similar patterns can be found for Greece (Athens, 2004), China (Beijing, 2008), and the U.K. (London,
2012).”
Based on the current status of Japan’s economy, it is quite clear that Japan must capitalize on the
thousands of foreign visitors the Olympics, Rugby World Cup, and possibly, the FIFA World Cup will
bring into the country. The economy is in need of greater consumption, and who better to consume than
thousands of visitors who are on vacation and ready to spend money? One could easily argue that an
increased amount of visitors could be the short-term difference maker in the Japanese economy. In fact, it
appears that the tourism industry will prove to be one of the economy’s greatest assets in rebuilding its
global strength. That’s where Airbnb comes in.
Airbnb Corners the Market on Sharing
Airbnb is a web-based service that pairs people who are looking for accommodations with travelers
who are willing to rent anything from a single room to an entire house. It has given everyday people the
ability to be innkeepers, very much like Uber has given regular people the chance to become taxi drivers.
Airbnb acts as a digital matchmaker, matching the traveler with a host. Every successful match made, means
Figure5

9. Airbnb receives commission from both the host and the traveler. Airbnb is proof of a world where
boundaries continue to crumble and the flat-earth theory grows increasingly credible with each click on the
mouse.
Airbnb has been met with unparalleled success, as many travelers are exchanging pricey hotel stays
for more local and authentic shared lodgings. This success can be seen in the fact that the company’s
valuation recently rang in at $24 billion. A recent article by Winkler and Macmillan for The Wall Street
Journal stated, “Home-rental site Airbnb Inc. has given potential investors in a $1 billion funding effort an
ambitious revenue forecast to justify a richer valuation than hotel giant Marriott International Inc. Airbnb
representatives in recent months told prospective investors the startup expects $850 million in revenue this
year, according to people who viewed the projections. That would be more than triple the recorded revenue
of $250 million in 2013. Airbnb recently raised that projection to more than $900 million after its site
performed better than expected in the first quarter, said a person familiar with the matter. The company’s
revenue is then expected to grow to $10 billion in 2020, said the people who viewed the projections”.
Airbnb’s growth potential is stunning, but what is even more interesting than its future financial prospects
is its ability to change the economic landscape.
Companies like Airbnb that capitalize on the growing sharing economy have undermined B2C
relationships, because now P2P (peer-to-peer) relationships are not only possible but advantageous to
both the supplying and demanding parties (Gavel). People with excess supply can lend a piece of their
capital to a person with demand. The supplier has nothing to lose, because the capital they are lending is
Figure 6

10. excessive to them. The supplier has an opportunity to generate revenue from a sunk cost, so there are only
benefits to be gained from this type of sharing. On the other hand, the person with the demand is looking
to pay the lowest rate possible for the capital they are borrowing. The lowest required rates of return are
going to exist in the sharing economy, because the supplier is offering excess capital and does not have a
serious need for a high rate of return. In addition, the sharing economy increases supply options, meaning
an increase of P2P relationships reduces scarcity and cause the required rate of return to fall. B2C
relationships, on the other hand, are driven by a scarce amount of supply, so the rate of return will
inevitably be higher. In acting as the liaison between supply and demand, Airbnb has created a new point
of equilibrium in the market, and the Japanese people and foreign visitors alike have responded positively
to this change.
Japan Clicks with Airbnb
Japan has largely contributed to Airbnb’s recent profitability, as it is Airbnb’s fastest growing
market (Nakamura & Takahashi). Due to the increased amount of tourism and hotel shortages in Japan,
Airbnb has been able to establish
a niche in the Japanese tourism
industry. Airbnb first began its
relationship with Japan in 2010,
and since then it has established
properties in all 47 prefectures
(Airbnb). In an economic impact
study released in late 2015,
Airbnb asserted that the company
had made a ¥221.9 billion impact
on the economy and supported
21,800 jobs in Japan. The study
showed that more than half a
million visitors used Airbnb
during their stay in Japan, and a
large majority were in Japan on
vacation. Over half of Airbnb
guests are Asian, with the largest
percentage coming from China.
Figure 7

11. Assuming that 13 to 15 million foreign visitors traveled to Japan in 2015, this data implies that 3%
of all foreign visitors used Airbnb to make arrangements for their accommodations. In other words, Airbnb
has managed to establish a healthy market share in only 5 years. Future growth is almost inevitable given
the projected growth of the tourism industry in Japan, as it continues to attract an increasing number of
foreign visitors. If Airbnb can reach 1 million users by the year 2020, they will have increased their market
share to 5%, approximately increasing their economic impact by ¥4.4 billion. For an economy in need of
stimulus and an increase in marginal income, a ¥4.4 billion contribution could be a significant one for the
Japanese economy. This is a conservative estimate, as Airbnb has seen exponential growth in the last 3
years.
Airbnb’s impact on the tourism industry and overall economy is twofold. First, the affordability of
Airbnb allows visiting travelers to stay longer and spend more. According to Airbnb’s report, “Airbnb
attracts visitors, who stay longer, spend more, and are more likely to return to Japan, fundamentally
strengthening the tourism industry and creating additional opportunities for growth without requiring a
large amount of government investment or expenditure on infrastructure. The majority of international
guests are return visitors who are looking for local experiences”. Their data shows this:
• 69% of international guests are return visitors.
• 79% of international guests reported that their Airbnb experience made them even more likely to
return to Japan.
• 28% of Airbnb guests would not have gone on their trip, or would not have stayed as long without
Airbnb.
• On average, each guest spends a total of ¥169,600 per trip.
• ¥39,800 is the daily average daytime spending per visitor. Daily accommodations per visitor cost
¥4,900. Combined, this means that each visitor spends an average of ¥44,700 per day, and the
average visitor stays 3.8 nights in a single Airbnb.
• 65% of Airbnb guests saved money on their trip by using Airbnb’s services.
• 75% of Airbnb guests who saved money using Aibnb’s services spent that money on shopping,
food, and entertainment.
There are a couple of noteworthy highlights contained in this data. First, returning visitors will
provide long-term benefits to the economy. Second, visitors who stay in the country for a longer period of
time will end up spending more money over that period of time. The more they see, the more they want.
The more they enjoy themselves, the more they will spend. Third, visitors who save money on
accommodations will end up benefitting key sectors of the economy. If by saving money on

12. accommodations, the visitor is able to spend more money in the shopping, food/beverage, and entertainment
sectors, economic stimulus becomes more widespread and mainstream.
The second aspect of Airbnb’s impact on the economy relates to the income received by individuals
who host travelers. Airbnb has reported that its Japanese hosts are diverse. They are from diverse
backgrounds, age groups, and income brackets. Regardless, becoming an Airbnb host seems to be growing
in popularity. Their data shows that 5,030 hosts took in travelers between the Summers of 2014 and 2015.
Airbnb’s economic impact report asserts, "Airbnb also enables hosts to afford to take professional chances
and pursue their dreams. Over half of hosts, 68 percent, are non-traditionally employed, with 29 percent
saying that income from hosting has allowed them to support themselves while freelancing.” This
information is very important, because it shows that Airbnb is providing people in Japan with an opportunity
to increase their marginal income. Chu and Kuwako’s assert that “the total income the hosts in Japan
received was 8.8 billion yen during the year ended June 2015, according to a survey by Airbnb.”
Figure 8

13. Basic economics show that an increase in individual marginal income will increase consumption-
driven stimulus. In other words, Japanese Airbnb hosts are able to leverage their capital in such a way that
it provides profit. The profit is then used to offset existing expenses, freeing up a larger portion of a person’s
income for spending or investing.
The information provided by the economic impact report also shows Airbnb is contributing to new
value creation. According to their data, more people are able to cover their expenses through Airbnb, which
means that they are able to leave a traditional job and create new value through research, development, or
entrepreneurship. Innovation also increases with an increase in marginal income, because finding capital to
fund startups or development
projects becomes much easier.
A recent CNN Money
article by Ripley and Wakatsuki
claimed that “the number of Airbnb
guests in the country surged 500%
last year,” and as a result “some
Japanese people have built
businesses out of Airbnb's growing
popularity in their country.” This
means that Airbnb has expanded an
existing market and invited every
Japanese person to join the hotel
industry. In relation to this, Airbnb
hosts come from a broad range of
income brackets. The implications
of this are clear; Airbnb is
contributing to economic mobility.
As marginal income
increases for Airbnb hosts who are
in the lower income brackets,
economic mobility becomes a
reality as these individuals are able to change brackets. The expansion of the middleclass is key to Japan’s
economic development. Japan’s poverty levels have been widely discussed in the last few years, and clearly
the Japanese government has some intentional work to do in this area. Policy, tax codes, and incentives
should be designed to pull people up from poverty into the middle class. This is essential for long-term
Figure 9

14. economic sustainability. Airbnb is a service that is helping this effort by providing individuals with extra
income.
Minpaku
While Airbnb has been profitable and in high demand in the Land of the Rising Sun, its ultimate
destiny has yet to be determined by lawmakers. It is still quite possible that the sun may set on Airbnb.
“Under pressure from the hotel industry and a populace concerned with the surge of foreigners in their
neighborhoods, Prime Minister Shinzo Abe’s government has released guidelines for home sharing -- called
minpaku in Japanese -- that could make most Airbnb rentals in the country illegal. Airbnb hosts would only
be allowed to rent to guests who stay for a week or longer, a minuscule slice of the market. The national
guidelines only become law if local municipalities decide to ratify them, but that is beginning to happen”
(Nakamura and Takahashi). According to Ripley and Wakatsuki of CNN Money, “those conditions could
leave many Airbnb hosts in the country on the wrong side of the law. Guests stay less than four nights on
average, according to the company. Local authorities are responsible for putting the rules into practice.
Rather than wait for the national plan to be finalized, one district in Tokyo has already gone ahead and
introduced restrictions, and a few others are working on similar moves.”
Whether or not to regulate Airbnb is a key decision that Japan has to make. It will be the difference
between a free economy that is ruled by the balance between supply and demand and a semi-free economy
ruled by government intervention. If Japan makes the wrong decision, it could have very serious ripple
effects throughout the economy. Japan’s economy has laid dormant for several years due to government
meddling. Now, the government is focused on setting the economy on a long-term growth trajectory, yet it
still wants to limit trade and regulate markets. This is a counter-productive choice. If the government truly
wants to remove price and wage controls, they must place an intentional focus on de-regulation. By taking
a limited regulation stance, the government will set the economy up for growth, value creation, and an
increase in marginal income.
Conclusion
The internet has changed the world of international finance. Not only does it allow economies to
coordinate specialization efforts and trade stocks and bonds, but it also gives economies an opportunity to
increase their GDP by capitalizing on the expendable wealth of foreign visitors. For example, Japan’s
economy is plagued by a few economic problems, but research shows that Aibnb can help Japan tackle
these issues.

15. First, their infrastructure is in need of updating. They are attracting an increasing number of foreign
visitors, but their hotel shortage is hindering them from making the most of each visitor’s stay. Second,
Japan’s economy is in need of greater consumption. For decades, the economy has been regulated by wage
and price controls. The economy is at a point now where it needs to grow, but first the wages and prices
must become market driven. Stimulus must come from an increased amount of spending and investment
from Japanese citizens. The spending of foreign visitors can also help to stimulate the economy as well.
Third, Japan needs to increase the amount of marginal income per individual and build a larger middle
class. Airbnb, an internet-based service, can help Japan work towards solving all of these problems, if
properly leveraged.
Problem 1: Japan’s Infrastructure Needs Updating
Nearly 20 million visitors travelled through Japan in 2015. The government is estimating that the
number will reach 30 million by the year 2020. This is good news for Japan. The visitors will spend money
while they are in the country, which will in turn increase consumption and contribute to GDP. So an
increased number of visitors will benefit Japan, except for the fact that Japan’s current infrastructure does
not support the current or projected volume of visitors.
In an article for The Wall Street Journal, Fujikawa
reports that “the country will face a shortage of 41,000
hotel rooms by 2020 requiring about $4.9 billion in
investment, assuming the number of arrivals reaches
25 million by then, according to Mizuho Research
Institute, a unit of Mizuho Financial Group, one of
Japan’s big three banks. In response, the tourism
agency has budgeted tens of millions of dollars to help
renovate existing hotel rooms, bolster vacancy
information at tourist offices and invite visitors to remote areas where more rooms are available.” Airbnb
can mitigate this shortage and increase the supply of lodging, while also downplaying capital expenditure
on infrastructure improvements. Airbnb already has over 5,000 hosts on record, which means that by adding
it to existing hotels and hostels the amount of lodgings available to guests has expanded to 85,000. While
this does not completely eliminate the shortage, it does make a significant difference. By allowing people
to open up and share their homes with visitors, Japan could continue to expand their offerings of hotels,
hostels, and general accommodations. This will require the government to de-regulate the sharing economy.
Figure10

16. In fact, home sharing needs to be encouraged and incentivized by the government, because it provides not
just one but several benefits for the economy.
Problem 2: Japan’s Economy Needs a Greater Amount of Consumption
Data shows that Travelers using Airbnb stay longer, because they pay less for their
accommodations. This in turns allows them to spend more in various sectors of the economy. In order to
get its economy started, Japan needs to focus its efforts on capitalizing off of the marginal income of
foreigners. The data shows that the visitors Japan has received to date are willing and ready to spend. Tourist
spending has exponentially grown in the last few years, as indicated by The Wall Street Journal (Figure
11). Japan is a popular destination for
Chinese travelers. China has an expanding
middle class. As a result, a large amount of
Chinese people are ready to travel and spend
a portion of their marginal income in foreign
countries. Japan should strive to be the
number one destination for Chinese travels,
in order to profit from their expendable
income. The department of tourism should
intentionally target all countries with a large
or expanding middle class.
In order to attract foreign visitors,
alignment within the government will need
to take place. It will not benefit the economy if the department of tourism is successful in drawing foreign
visitors, if the visitors are met with a poor experience arriving and leaving, being processed through
customs, or traveling within the country. Creating an enjoyable experience will take some thought and
expense on the Japanese government’s part. The government will need to incentivize its people to become
more globally aware, and it will need to remove barriers that would keep foreigners from visiting Japan.
That means removing regulations that would hinder Airbnb. The online service is clearly popular,
profitable, and a valuable piece of solving the hotel shortage. Therefore, its growth and prosperity will serve
as a strategic economic advantage to Japan’s economy.
Problem 3: Japan’s Needs to Increase Individual Marginal Income and Expand the Middle Class
Figure11

17. Japan’s economy is in desperate need of increased marginal income and increased spending. This
is due in part to the fact that the Japanese people are prone to save money rather than spend it. How does
an economy solve this problem? The key word is excess. People who have enough income to cover their
basic needs and then have enough left over to spend on their wants will stimulate the economy. Airbnb
offers the Japanese people a way to make excess income. If Japanese Airbnb hosts are able to cover their
cost of living expenses by renting a portion of their home to visitors, anything else they earn through their
job or other means becomes marginal. In other words, Aibnb puts money into people’s pockets, and when
people feel wealthier they spend more. Increased spending money gives people options. They have mobility
between income brackets, because they now have options to invest or spend their money to increase their
earning potential via education or skill development. This is how larger middle classes are created, and
Aibnb has the potential to help this effort along in Japan.
In short, Japan should embrace Airbnb. It has the potential to aid the government’s effort to reform
and reinvigorate the economy. Guidelines and regulations currently being issued by Japan’s government
should be removed. If anything, Japan needs to figure out a way to ensure that taxes are paid on the Airbnb
rentals, but no limits other than taxes should be placed on Airbnb guests or hosts. Rather than limiting
Airbnb, Japan should capitalize on its ability to bring visitors in and keep them in the country longer.

18. Exhibit A

19. Exhibit B

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