How to Bypass the 180-Day Minpaku Limit by Obtaining a Ryokan Business License

One challenge that’s unavoidable when running a minpaku (vacation rental) business is the 180-day annual operating limit imposed by the Private Lodging Business Act (the “minpaku law”). The most practical way to break through this 180-day ceiling is to obtain an operating license under the Ryokan Business Act. Once you secure a ryokan business license, you’re no longer bound by the day-count restrictions that apply to minpaku, and you can operate your accommodation facility a full 365 days a year.

In this article, we’ll walk minpaku operators through the concrete steps for obtaining a ryokan business license and overcoming the operating-day barrier, covering practical details such as costs, timelines, and required documents. This content is useful both for those already operating under a minpaku law registration and for anyone looking to start a lodging business from scratch.

Obtaining a ryokan business license is by no means a low hurdle, but with the right process, it’s entirely achievable even for individual operators. If you want to maximize your revenue, please read on to the end.

Why You Need to Break Through the 180-Day Minpaku Limit

Under the Private Lodging Business Act, minpaku operations are capped at a maximum of 180 days (nights) of operation per year. On top of that, many municipalities impose their own additional restrictions through local ordinances, and it’s not uncommon for the effective operating limit to shrink to just 100–120 days a year. For example, some municipalities prohibit weekday operations in residential-only zones, making it virtually impossible to reach 180 days with weekends and holidays alone.

This restriction has a direct impact on revenue. Suppose a property earns an average of ¥15,000 per night. Operating for 180 days would yield annual revenue of ¥2.7 million. On the other hand, if you obtain a ryokan business license and can operate 365 days a year, revenue could climb to roughly ¥3.83 million at a 70% occupancy rate, or about ¥4.38 million at 80% occupancy. Since fixed costs like rent and management fees accrue regardless of the number of operating days, the difference in operating days translates directly into a difference in profit. Staying under the minpaku law can mean a longer road to recovering your investment, and for some properties, there’s a risk of never escaping the red.

The Basics of the Ryokan Business Act and How It Differs from the Minpaku Law

Types of Business Categories Under the Ryokan Business Act

The Ryokan Business Act defines three categories of business: “hotel/ryokan business,” “simple lodging business (kan’i shukusho),” and “boarding house business.” In most cases, minpaku operators aim to obtain a “simple lodging business” license. This category covers facilities with a structure in which multiple guests share a communal sleeping space, and it also includes guesthouses and capsule hotels. To apply for this license, the total floor area of guest rooms must be at least 33 square meters (or, if there are fewer than 10 guests, at least 3.3 square meters per person).

The Fundamental Difference from the Minpaku Law

The minpaku law operates on a “notification” system, meaning you can start your business relatively easily simply by submitting the required paperwork. The Ryokan Business Act, on the other hand, operates on a “licensing” system, which requires you to clear multiple standards—covering fire safety, public health, and building codes—and pass a government review before you can begin operating. In exchange, there’s no cap on operating days, and you’re permitted to operate 365 days a year. Holding a ryokan business license also boosts your credibility on booking platforms and gives you more freedom in setting your rates.

Preliminary Checks Before Obtaining a Ryokan Business License

Checking the Zoning Designation

To obtain a ryokan business license, your property must be located in a zoning area where such operations are permitted. Ryokan businesses can operate in commercial zones, neighborhood commercial zones, quasi-industrial zones, and industrial zones, among others. In principle, ryokan businesses are not permitted in Category 1 or Category 2 low-rise exclusive residential zones. Before signing a lease or purchase agreement, always check the zoning designation using your municipality’s city planning map—this information is available for free on municipal websites or at local government offices.

Checking Building Structure and Facility Requirements

To obtain a simple lodging business license, the building’s designated use under the Building Standards Act must conform to “hotel/ryokan” classification. If you plan to use a room in an ordinary house or apartment as-is, you may need to go through a change-of-use procedure. In some cases, buildings with a total floor area of 200 square meters or less are exempt from requiring a building confirmation application, but the rules vary by municipality, so it’s essential to consult with your local building guidance division beforehand.

Checking with Neighbors and the Management Association

If you’re seeking a ryokan business license for a unit in an apartment building, you’ll need to confirm that the management bylaws don’t prohibit lodging operations. Many condominium associations revised their bylaws around 2018 to ban lodging businesses, including minpaku. Even for detached houses or row houses, complaints from neighbors can become a source of trouble, so explaining your plans to nearby residents in advance can help ensure smoother operations once you’ve obtained your license.

Concrete Steps to Obtain a Ryokan Business License

Step 1: Preliminary Consultation with the Public Health Center

First, hold a preliminary consultation with the public health center that has jurisdiction over your property’s location. At this stage, bring the property’s floor plans and address to check whether you’re likely to be granted a license. The health center can walk you through specific standards regarding room size, ventilation equipment, natural lighting, number of toilets, and washbasin facilities. This consultation is free, though appointments are usually required, so call ahead to confirm a date and time. If any issues are identified at this stage, you can plan renovations accordingly.

Step 2: Consultation with the Fire Department and Fire Safety Equipment Installation

A ryokan business license requires a certificate of fire code compliance. Since your property’s designated use will change to “hotel/ryokan,” fire safety equipment requirements differ from those for residential use. In most cases, you’ll need to install automatic fire alarms, emergency exit lights, and fire extinguishers. Even for small facilities, budget roughly ¥200,000–¥500,000 for fire safety equipment installation work. Consultations with the fire department are also free of charge.

Step 3: Carrying Out Necessary Renovation Work

Based on feedback from the health center and fire department, you’ll carry out renovation work on the property. Common renovations include installing a front desk (or an ICT system as a substitute), installing emergency lighting, and modifying partitions between guest rooms and hallways. In recent years, front desk requirements have been relaxed, and more municipalities now permit check-in via tablet-based video calls in lieu of an in-person front desk. Renovation costs vary widely depending on the property’s condition, but for a small simple lodging facility, ¥500,000–¥1,500,000 is a reasonable benchmark.

Step 4: Preparing and Submitting the License Application

Once renovations are complete, submit your license application to the health center. Key required documents include: the business license application form, floor plans showing the facility’s structure and equipment, the fire code compliance certificate, a certified copy of the property’s registration, a landlord’s letter of consent (for rental properties), and payment of the application fee (typically around ¥20,000–¥30,000, though it varies by municipality). If the documents are complete, your application will be accepted, and a date will be scheduled for an on-site inspection by health center staff.

Step 5: On-Site Inspection and Issuance of the License

Health center staff will visit your property to verify that the actual facilities match what’s stated in your application. During the inspection, they’ll closely check details such as room size, ventilation equipment function, the number and cleanliness of toilets and washbasins, and how bedding is managed. If everything checks out, the business license is typically issued within one to two weeks. From initial consultation to license issuance, expect the overall process to take two to three months if things go smoothly, or four to six months if major renovation work is involved.

Estimated Costs for Obtaining a Ryokan Business License

Government Fees and Document Preparation Costs

Application fees paid to the health center vary by municipality, but for a simple lodging business, they typically run around ¥20,000–¥30,000. If you hire a licensed administrative scrivener (gyoseishoshi) to prepare your application documents, expect a separate fee of roughly ¥150,000–¥300,000. Preparing the documents yourself can save on costs, but drafting floor plans and confirming legal requirements takes considerable effort, so first-timers should consider consulting a professional.

Fire Safety Equipment and Renovation Costs

As mentioned above, budget roughly ¥200,000–¥500,000 for fire safety equipment installation, and ¥500,000–¥1,500,000 for other interior renovations. Altogether, even a small property often requires an initial investment of around ¥1,000,000–¥2,000,000. That said, if the property was already operating under the minpaku law, some of the existing fire safety equipment and interior fittings may be reusable, potentially reducing the additional investment needed. Once you obtain a ryokan business license and can operate 365 days a year, the increase in annual revenue typically allows you to recoup your investment within one to two years.

Points to Watch Out for When Obtaining a Ryokan Business License

Local Rules Vary by Municipality

While the Ryokan Business Act is a nationwide law, its enforcement regulations and operational standards vary by municipality. For example, some municipalities don’t recognize the relaxed front desk requirements, while others require operators to hold an explanatory meeting for nearby residents beforehand. Don’t take information you find online at face value—always confirm directly with the health center that has jurisdiction over your property’s location. A precedent set in one municipality doesn’t necessarily apply in yours.

Negotiating with the Landlord for Rental Properties

To obtain a ryokan business license for a rental property, you’ll need written consent from the property owner. Since standard lease agreements typically don’t permit conversion to a lodging business, you’ll need to negotiate with the landlord. Landlords tend to worry about property wear-and-tear from unspecified numbers of guests and potential disputes with neighbors, so presenting a concrete plan for cleaning arrangements and noise mitigation, along with clear terms regarding rent increases or restoration obligations, will make it easier to secure their consent.

Ongoing Obligations After Obtaining the License

Even after obtaining a ryokan business license, you have ongoing obligations, including maintaining a guest registry (kept for three years), performing regular sanitation management, and cooperating with periodic inspections by the health center. Guest registries are legally required to record each guest’s name, address, occupation, and nationality (and, for foreign nationals, their passport number). Failing to fulfill these obligations can result in license revocation or a business suspension order, so make sure your operational systems are fully in place before you begin operating.

Contact Stay Buddy Inc. for Your Vacation Rental Management Needs

Obtaining a ryokan business license requires substantial expertise and hands-on experience—from selecting the right property, to navigating administrative procedures, to installing fire safety equipment, to building an operational framework. For those tackling this process for the first time in particular, it’s easy to get stuck wondering what needs to be done at each stage.

Stay Buddy Inc. specializes in operational management for minpaku and lodging businesses. We provide comprehensive, one-stop support covering everything from assistance with obtaining a ryokan business license to day-to-day operations, guest services, and cleaning management after you’re up and running.

If you’re struggling to grow revenue under the 180-day operating limit, or if you’re considering switching to a ryokan business license but aren’t sure where to start, please reach out to Stay Buddy Inc. We’ll propose the optimal plan tailored to your property’s condition and local market characteristics.

Feel free to get in touch through Stay Buddy Inc.’s official website. Our experienced staff are ready to fully support the success of your lodging business.