Outsourcing Simple Lodging Operations: What’s the Going Rate for Fees? A Complete Comparison with Minpaku Management

“I got my simple lodging (kan’i shukusho) license, but I’m not sure who to trust with day-to-day operations…”

“What’s the actual difference between a minpaku management company and a hotel operations company, and how much does the cost really vary?”

“Simple lodging” (licensed under the Hotel Business Act) allows for 365-day operation and offers strong earning potential. However, compared to “minpaku” (governed by the Private Lodging Business Act with its 180-day annual cap), running a simple lodging property comes with significantly higher legal and operational hurdles.

As a result, many owners consider outsourcing operations—yet the going rate for management fees and the criteria for choosing a provider remain unclear, leaving many owners stuck.

Let’s get straight to the point.

The typical cost for outsourcing simple lodging operations runs **roughly 10%–30% of revenue (varying by company and scope of service).

But more important than the number itself is determining whether that provider is a true professional—one who can deliver hotel-level operational quality and maximize revenue while strictly complying with the demanding Hotel Business Act.** Choosing a provider that’s simply extending their “minpaku management” services carries real risk: legal violations and missed revenue opportunities.

In this article, we’ll break down the cost structure and typical rates for outsourcing simple lodging operations, along with the crucial differences between “minpaku management” and “simple lodging operations,” from a professional’s perspective.

What’s the Fundamental Difference Between “Simple Lodging” and “Minpaku (New Law)” When It Comes to Operations?

Before diving into cost benchmarks, it’s essential to understand just how different the operational “weight” of these two license types really is.

1. Operating Days (365 vs. 180)

• Minpaku (New Law): Capped at 180 operating days per year.
• Simple Lodging: Can operate at full capacity, 365 days a year. This doesn’t just mean doubled revenue—it also means doubled frequency of cleaning, linen changes, and guest support, plus faster wear on facilities and amenities. This demands a far more robust and well-organized operational system.

2. Legal Responsibility and Hygiene Standards

• Minpaku (New Law): Treated as an extension of residential use, with relatively relaxed requirements.
• Simple Lodging: Governed by the **”Hotel Business Act,”** which imposes hotel/ryokan-equivalent hygiene obligations (regular pest control, water quality testing, etc.), strict guest register management, and mandatory identity verification (in person or via ICT devices). Health department inspections are also part of the picture, making professional-grade management capability a must.

3. Expected Service Level

Because simple lodging properties are officially recognized as “accommodation facilities,” guest expectations run higher. Beyond homely hospitality, guests expect hotel-grade cleanliness and swift resolution of any issues.

Typical Costs and Fee Breakdown for Outsourcing Simple Lodging Operations

So how much does it actually cost to hand operations over to a professional?

Standard Fee Range: 15%–25% of Revenue

The most common pricing model is a performance-based fee tied to accommodation revenue.

• Around 15%: Primarily covers guest acquisition (OTA management) and message handling. Cleaning arrangements may be billed separately or left to the owner.
• 20%–25%: This is the going rate for a **”full-service” package** covering everything—guest acquisition, message handling, cleaning management, issue resolution, revenue management (dynamic pricing), and regular reporting.

Additional Costs Beyond the Management Fee

Overlooking these can throw off your financial projections. On top of the base fee, expect the following costs to arise separately:

• Cleaning and linen fees: Charged per guest checkout (ranging from a few thousand to tens of thousands of yen each time).
• Consumables: Restocking costs for toilet paper, shampoo, detergent, and similar items.
• OTA fees: Commission paid to booking platforms like Airbnb and Booking.com (roughly 15% of revenue).
• System usage fees: Monthly costs for a channel manager or PMS (property management system).
• Regulatory inspection fees: Fire safety equipment inspections, water quality testing specific to simple lodging facilities, and similar requirements.

“Minpaku Management Companies” vs. “Simple Lodging Operations Companies”

Search online and you’ll find the term “minpaku management” everywhere. But if you’re entrusting a simple lodging property to someone, you need to carefully assess that provider’s scope of expertise and actual capabilities.

Minpaku Management Companies (Primarily Serving New-Law Minpaku)

• Characteristics: Mainly support individual owners running side businesses, and tend to charge lower fees.
• Things to watch for:
  • They may lack the know-how needed for the strict hygiene standards and fire safety compliance unique to the Hotel Business Act.
  • If they operate with a “as long as we fill 180 days, we’re good” mentality, they’ll fail to unlock the full revenue potential of a 365-day-capable simple lodging property.
  • Many lack an on-the-ground response team and handle everything online only.

Simple Lodging Operations Companies (Serving Hotel/Ryokan-Class Businesses)

• Characteristics: Deliver professional-grade operations built around sustained, 365-day, high-occupancy performance.
• Advantages:
  • Revenue management: They leverage AI and data to adjust pricing dynamically throughout the year, maximizing sales.
  • Legal compliance: Thorough legal management to protect your business—negotiating with health departments and fire authorities, staying current on regulatory changes, and more.
  • Facility management: They can propose building maintenance and renovation plans to preserve your asset’s value.
  • Quality control: They deliver hotel-grade cleaning standards and sophisticated multilingual guest support.

5 Checkpoints for Choosing the Right Provider

When selecting an operations partner for your simple lodging property, be sure to confirm the following five points.

1. Do They Have Actual “Hotel Business” Operating Experience?

Look beyond track record with “minpaku (new law)” properties and confirm whether they have actual experience operating “simple lodging” facilities or hotels. The key question: are they currently managing properties that hold a Hotel Business Act license number?

2. Do They Have a Concrete Strategy for Maximizing Revenue?

Don’t settle for a provider that just takes bookings—ask them how they plan to actually grow revenue. Providers who can give data-backed answers to questions like “How do you implement dynamic pricing?” or “Which OTA platforms do you perform strongest on?” are worth trusting.

3. Is Their Emergency Response System Solid?

Operating 365 days a year means facing potential trouble 365 days a year. Whether they have an on-call, 24-hour response team (in-house or partnered) ready to handle late-night noise complaints or equipment failures is a critical factor that can determine your business’s survival.

4. How Do They Manage Cleaning Quality?

Reviews for simple lodging properties hinge on cleaning quality. Ask: “Is cleaning outsourced or handled in-house?” and “What’s your post-cleaning inspection process?” Look for systems that guarantee quality, such as photo-documented reports.

5. Transparency of Contract Terms and Cost Structure

Don’t be lured in by a low headline rate like “just 10% commission!” Behind that low price, there may be hidden markups—like cleaning fees with a fee added on top, or issue-resolution services billed separately. It’s important to compare providers based on total running costs, not just the headline fee.

Conclusion: Simple Lodging Properties Truly Shine When Partnered with Professionals

Simple lodging represents one of the most powerful business models in real estate investment, offering exceptionally high yield potential.

But unlocking that potential and sustaining stable, long-term revenue requires more than a part-time management service—it requires **professional operations from a true business partner.**

Weigh the management fee “cost” against the “performance” you get in return—increased revenue and peace of mind—and choose the best partner, one worthy of managing your valuable asset.

Leave Your “Operations” to Us, the Professionals

“I want to know what a reasonable fee rate looks like for my property.”

“My current management company doesn’t seem to have hotel business know-how, and I’m worried…”

“I want to run at full capacity 365 days a year and maximize revenue.”

Whatever your concern, please reach out to us.

We at Stay Buddy Inc. are a team of professionals specializing in the operation of 365-day accommodation facilities—including not just minpaku, but “simple lodging” and “special zone minpaku” as well.

Here’s what we offer:

• ① A specialist team deeply versed in the Hotel Business Act, building a safe, fully compliant operational framework.
• ② Advanced revenue management powered by AI and dedicated staff, maximizing your property’s earnings.
• ③ A fully transparent, open-book fee structure, ensuring a partnership you can trust and understand completely.

Let’s transform your simple lodging property from just an “inn” into a thriving, high-revenue “business.”

Backed by proven results and deep expertise, we’re ready to support you every step of the way. Get started with a free revenue assessment—reach out to us today.