Author
Stay Buddy Inc.
What Is Minpaku (Vacation Rental)?
Minpaku is a new form of lodging business in which private residences are offered as accommodations, primarily catering to foreign tourists. There are three types: those based on the Hotel Business Act, “special zone minpaku” operated under the National Strategic Special Zones system (such as in Ota Ward, Tokyo, and Osaka City), and those governed by the Private Lodging Business Act (Minpaku Shinho) enacted in 2018.
Osaka, where our headquarters is located, is expected to see a surge in foreign tourists ahead of the 2025 World Expo and the Integrated Resort (IR) scheduled to open in 2029, creating favorable conditions for starting a minpaku business. In this article, we’ll explain how to get started with special zone minpaku in Osaka City and how to succeed with it.
What Is Special Zone Minpaku (Osaka City)?
Special zone minpaku is a lodging system recognized as an exception to the Hotel Business Act under the National Strategic Special Zones Act.
Nationwide, this system is only available in a limited number of areas, such as Osaka Prefecture, but because its requirements are more relaxed than those for standard Hotel Business Act permits, existing homes can be used for minpaku without changing their designated use. While some municipalities and districts within Osaka Prefecture restrict special zone minpaku operations, Osaka City has comparatively relaxed restrictions, which is why the number of applications has been increasing year after year.
Unlike the Private Lodging Business Act (Minpaku Shinho), special zone minpaku has no limit on the number of operating days, and in Osaka City, stays of two nights and three days or longer are permitted. This makes it especially well-suited for operators focused on maximizing revenue.
Key Points for Success with Special Zone Minpaku
To succeed with special zone minpaku, the key is differentiating your property from others and achieving high guest satisfaction. Here, we introduce several success points to keep in mind when starting a special zone minpaku business. Putting these into practice will increase your chances of attracting more guests and building a base of repeat customers.
1. Choose a Great Location
Location selection is one of the most crucial factors for success with special zone minpaku. Osaka City is home to an international airport and is gaining attention as a convenient location for overseas tourists and business travelers. By choosing an area with good access to the airport or major transportation hubs, you can more effectively appeal to foreign tourists and business travelers alike.
Locations near tourist attractions, shopping districts, or restaurant areas are also appealing. If you’re targeting families or student travelers, it’s worth choosing a location that lets you offer reasonable pricing alongside a stay experience that highlights the area’s unique local character.
2. Enhance the Guest Experience
To make your special zone minpaku the property guests choose, the key is making the stay experience as appealing as possible. Try incorporating the following ideas to stand out from other properties.
Interior and Thematic Design
By incorporating Japanese-inspired modern interiors or decor that reflects the local area’s character, you can offer a photogenic accommodation that stands out on social media.
Improve Service Quality
Thorough cleaning, regular restocking of amenities, and attentive staff hospitality all help boost guest satisfaction. For international guests in particular, offering multilingual support and guide maps can be highly effective.
Incorporate Local Experiences
Providing an “area guide” that introduces local restaurants and cultural experiences, or offering collaborative services with nearby partner shops, can boost overall guest satisfaction. Popular examples include Japanese sweets-making experiences and information on local festivals.
3. Promotion Using the Web and Social Media
An effective promotional strategy is essential for attracting guests to your special zone minpaku. By leveraging digital marketing, you can showcase your property’s appeal to travelers both in Japan and abroad.
Utilize OTAs (Online Travel Agencies)
Listing your property on booking platforms such as Airbnb and Booking.com makes it easier to attract first-time guests. On these platforms, it’s important to provide detailed property information, appealing photos, and carefully manage reviews.
Boost Awareness Through Social Media
Post photos and promotional videos of your property on social media platforms such as Instagram and Facebook. Instagram, in particular, is an effective way to attract younger guests by showcasing photogenic accommodations and the appeal of the surrounding area.
Leverage Reviews and Ratings
Actively welcome reviews and feedback from guests and use them to improve your operations, which in turn boosts your ratings. Properties with high ratings find it easier to attract new guests, so always strive to provide high-quality service.
To succeed with special zone minpaku, it’s essential to accurately understand guest needs and provide an appealing stay experience. By keeping these points in mind and putting together a solid operational plan, you can build a special zone minpaku property that more guests will choose.
Steps to Starting a Special Zone Minpaku in Osaka City
Starting a special zone minpaku business in Osaka City requires several preparatory steps and procedures. Use the following steps as a guide to ensure a smooth launch.
1. Check and Select a Property
Confirm that the property you plan to use for your special zone minpaku meets Osaka City’s requirements. The property must be located within a designated eligible area where stays of two nights and three days or longer are permitted. Also, take into account the surrounding environment and access conditions to choose a property that will be comfortable for guests.
2. Confirm Fire Safety and Building Code Compliance
Even when using an existing residence for special zone minpaku, you must confirm compliance with fire safety regulations and building codes. In particular, equipment such as fire alarms and fire extinguishers is mandatory. Depending on the property’s structure and intended use, additional measures may be required, so it’s a good idea to consult with a specialist for peace of mind.
3. Prepare Application Documents
When applying for special zone minpaku status with Osaka City, you’ll need to prepare the necessary documents. Typically required items include property floor plans, a certificate of registered matters for the property, and identification for the operator. Be sure to check the latest information on the Osaka City website or at a municipal office regarding application requirements, and prepare all documents thoroughly to avoid any deficiencies.
4. Explain to Neighboring Residents
Before starting a special zone minpaku business, you need to explain your plans to neighboring residents in advance and gain their understanding. To help prevent disputes with the local community, it’s a good idea to clearly communicate your accommodation rules and management system.
5. Apply and Undergo Review
Once your documents are ready, submit your special zone minpaku application at the relevant Osaka City office. The review process can take several weeks, so be sure to apply with plenty of time to spare. If any deficiencies or missing items are found, you’ll be asked to make corrections, so respond promptly when contacted.
6. Prepare to Launch Your Business
Once your permit has been approved, prepare your property as an accommodation. Set up amenities and interior furnishings, and get ready to list your property on booking platforms (OTAs). Prepare photos and descriptions to create a listing page that will attract guests effectively.
[Operational Know-How]
3 Risks and Drawbacks of Special Zone Minpaku
Special zone minpaku offers the advantage of year-round operation and a comparatively easier application process than other lodging formats. However, it’s risky to start a business based solely on these advantages. Special zone minpaku comes with several risks and drawbacks, and understanding them thoroughly in advance is key to success. Below, we take a detailed look at the risks worth keeping in mind when operating a special zone minpaku.
1. A Minimum Stay Length Is Mandatory
With special zone minpaku, guests are required to stay a minimum of two nights and three days. This restriction makes it difficult to target business travelers who want just a single night’s stay, or travelers seeking a short stay for a flight layover.
A real-world example of failure involves an operator who opened a guesthouse focusing solely on the advantage of year-round, 365-day operation under special zone minpaku, only to struggle to attract guests due to the barrier created by the minimum stay requirement.
To avoid this risk, it’s essential to build accommodation plans that target long-term stay guests and families. For example, providing amenities such as a kitchen and washing machine to create a comfortable environment for mid- to long-term guests is a key strategy for turning this restriction to your advantage.
2. Prone to Price Competition
Areas designated as National Strategic Special Zones, where special zone minpaku operates, tend to have a high concentration of minpaku properties. This means intense price competition with nearby competing properties is highly likely.
For example, even if the average nightly rate for minpaku properties in the same area is 15,000 yen, special zone minpaku rates can sometimes drop to as low as around 8,000 yen. This price decline often stems from the fact that applications within National Strategic Special Zones tend to be approved regardless of building type, which can lead to an oversupply of properties.
To avoid getting caught up in price competition, differentiating your property from others is essential. Offer a unique theme or provide guests with experiences unique to the local area to attract bookings that aren’t based solely on price comparisons. For instance, offering welcome gifts featuring local specialty products or accommodation plans that include a guided tour can help set your property apart from the competition.
3. Government Approval Takes Time
Another risk of starting a special zone minpaku business is that it takes time to go from application to approval. Under the Private Lodging Business Act (Minpaku Shinho), you can begin operating as soon as your notification is accepted by the public health center, but with special zone minpaku, an on-site inspection is required to confirm that the property matches the details in your application.
During this inspection, public health center staff visit the property to check its condition and equipment. However, depending on scheduling coordination and the possible need for a follow-up inspection, it can sometimes take more than three weeks to obtain approval. Furthermore, if the actual property doesn’t match the application details, the process may be delayed even further.
To reduce this risk, thorough advance preparation is essential. Make sure your application documents are filled out accurately, and confirm that your property’s equipment and condition fully match the application details before the on-site inspection takes place. It’s also worth considering consulting with a specialist familiar with the application process to help ensure smooth communication with the authorities.
Considering Special Zone Minpaku in Osaka City? Talk to Stay Buddy
Special zone minpaku allows for flexible, year-round operation, but it also comes with requirements such as minimum stay lengths and the need to explain your plans to neighboring residents—all of which call for careful advance preparation and follow-through.
Succeeding with special zone minpaku requires thorough preparation, including property selection, installation of fire safety equipment, and completing the application process with the public health center. Additionally, building good relationships with neighboring residents while offering an appealing accommodation can help you earn repeat guests and positive reviews.
If you feel uncertain about the special zone minpaku application process or operational requirements, or simply don’t have the time to handle the procedures yourself, we’re here to help. Stay Buddy Inc. can handle everything from the special zone minpaku permit application to full operational support.
If you’re looking to launch your minpaku business smoothly and secure stable revenue, please feel free to reach out to us. Our experienced staff will provide comprehensive support for your minpaku business.
