Key Property Selection Tips for Starting a Lodging Business in Osaka: Preparing for the Possible End of the Special Zone Minpaku System
With the Osaka-Kansai Expo 2025 just around the corner, Osaka’s lodging market is booming like never before. Alongside the recovery in inbound demand, many people are considering entering the minpaku (vacation rental) business for the first time.
When operating a minpaku in Osaka, many operators rely on the “National Strategic Special Zone Act” (Special Zone Minpaku system). Unlike the “Private Lodging Business Act” (the so-called new minpaku law), which limits operation to 180 days per year, this is an extremely powerful system that allows 365-day operation.
However, any savvy investor or business owner should have one concern in the back of their mind.
“What would happen if the Special Zone Minpaku system were abolished in the future?”
Let us give you the conclusion of this article up front.
The right approach to property selection for running a long-term, stable lodging business is to choose a property with an eye not only toward meeting the certification requirements for Special Zone Minpaku, but also toward obtaining a “Hotel Business Act” (simple lodging) license from the very start.
In this article, we thoroughly explain, from a professional perspective, the potential risks inherent in the Special Zone Minpaku system, along with concrete points for identifying “high-value properties” that remain solid even amid changes to or abolition of the system.
Why Relying Solely on “Special Zone Minpaku” Is Risky
Thinking “We’re currently operating fine under Special Zone Minpaku, so we’re fine” carries risk when it comes to the long-term sustainability of your business. This is because Special Zone Minpaku is, after all, a “special exception measure” established as part of the national growth strategy.
The Possibility of System Changes or Abolition Is Not Zero
Special Zone Minpaku is based on the special “National Strategic Special Zone Act.” Unlike the “Hotel Business Act,” which is a permanent law, this special law carries the possibility that the content of the system could be revised, or in the worst case, the system itself could be terminated, due to policy shifts or changes in social conditions.
If the system were abolished, facilities operating as Special Zone Minpaku would in principle face a choice between two options: transitioning to the “new minpaku law” (with its 180-day limit) or newly obtaining a “hotel business license.” Since the 180-day limit would cut revenue roughly in half, some businesses would find it difficult to continue operating.
Lost Opportunities Due to the “Minimum 2 Nights, 3 Days” Restriction
Beyond the issue of risk, Special Zone Minpaku also has a weakness in terms of profitability. In Osaka City, Special Zone Minpaku requires a stay of “at least 2 nights, 3 days.”
As a result, huge demand from business travelers on short trips and domestic tourists wanting to stay just one night is currently being missed entirely.
The Strongest Risk Hedge: Meeting the Standards of the Hotel Business Act
The optimal solution for preparing for future system changes while also maximizing current profitability is to choose a property capable of obtaining a “Hotel Business” (simple lodging) license.
With a hotel business license, you can continue operating confidently 365 days a year, regardless of what happens to the Special Zone Minpaku system. Furthermore, since there is no restriction on the number of nights stayed, you can accept one-night guests as well, allowing you to boost your occupancy rate.
So specifically, what kind of property should you choose to obtain this powerful “hotel business license”?
5 Checkpoints for Choosing a Property Without Failure
Obtaining a hotel business license comes with a higher hurdle than Special Zone Minpaku or the new minpaku law. To avoid the heartbreak of purchasing or leasing a property only to find “we couldn’t get the license,” be sure to check the following five points.
Point 1: [Most Important] Check the “Zoning Designation”
This is the first, and biggest, hurdle.
For hotel businesses (hotels and simple lodging facilities), the locations where they can operate are strictly limited by the “zoning designation” (yōto chiiki) set forth under the City Planning Act.
- Areas where operation is not permitted: **”Residential-type zones”** such as Category I and II Low-rise Exclusive Residential Zones, Category I and II Medium-to-High-rise Exclusive Residential Zones, and Category I and II Residential Zones (with some exceptions).
- Areas where operation is permitted: **”Commercial Zones,” “Neighborhood Commercial Zones,” and “Quasi-Industrial Zones,”** among others.
In the case of Special Zone Minpaku, operation is permitted in some exclusive residential zones as well, but if you are aiming for a hotel business license, exclusive residential zones are, in principle, off limits. When property hunting, the golden rule is to first check the zoning designation using resources such as Osaka City’s map information site “Map Navi Osaka,” and target commercial zones and similar areas.
Point 2: Whether the Building Has a “Certificate of Compliance Inspection”
Applying for a hotel business license generally requires a **”certificate of compliance inspection” (kensa-zumi-shō)**, which proves that the building complies with the Building Standards Act.
In particular, with older properties and detached houses, this document is often lost. If the certificate of compliance inspection is unavailable, you’ll need to commission a first-class architect or similar professional to conduct a “legal compliance status survey,” which requires an additional several hundred thousand to over one million yen and several months of time.
For a smooth licensing process, it is extremely important to choose a property for which the certificate of compliance inspection still exists, or for which it can be reissued.
Point 3: The Width of the Adjacent Road (Road Access Requirement)
The width of the road the building faces is also important.
Under the Building Standards Act, in principle a site must be adjacent to a road at least 4 meters wide, with at least 2 meters of frontage. Old traditional houses located in the back alleys of Osaka City are charming and appealing, but there are cases where the road in front is too narrow to obtain a hotel business license (or large-scale renovations become necessary).
From the perspective of ensuring firefighting access and evacuation routes as well, road access requirements must always be met.
Point 4: The Hurdle of Installing Fire Safety Equipment
Because hotel business facilities house an unspecified number of guests, they are required to have stricter fire safety equipment than ordinary residences.
The item that has a particularly large impact on cost is the **”automatic fire alarm system” (jikahō)**.
- The building’s total floor area
- The building’s structure (wood-frame, reinforced concrete, etc.)
- The number of floors
The equipment required varies depending on these factors. For example, for buildings above a certain size, an expensive automatic fire alarm system installation becomes mandatory, sometimes requiring an initial investment of several million yen. Before purchasing a property, visiting the local fire department for a preliminary consultation to estimate how much equipment investment will be needed is key to avoiding budget overruns.
Point 5: For Condominiums, Check the “Management Regulations”
If you’re operating a hotel business not in a detached house but in a unit within a condominium building, then in addition to the physical building requirements, the “soft” rules of the building can also become an obstacle.
You need to check the condominium’s **”management regulations”** to see whether minpaku (private lodging business) or hotel business operations are explicitly prohibited, or explicitly permitted.
Many condominiums prohibit minpaku to prevent disputes among residents. Even for properties advertised as “minpaku allowed,” care is needed to inquire with the management association about whether this refers only to the “new minpaku law (180 days)” or also includes “hotel business” operations.
Summary: A Management Decision to Own an “Asset” Resilient to Change
Special Zone Minpaku is an extremely effective tool in Osaka today. However, when you take the long view of running your business for 10 or 20 years, having a solid foundation that isn’t at the mercy of regulatory changes is an important responsibility for any business owner.
Choosing a property that can obtain a “hotel business license.”
This is not merely a matter of legal compliance—it is nothing less than acquiring a “true asset” that simultaneously enhances the “safety” and “profitability” of your business, and continues to generate value long into the future.
By developing an eye for legal potential, not just short-term yield and convenience, you can guide your lodging business in Osaka toward success.
Let Our Professionals Assess That “Property Choice” For You
“There’s a property I’m interested in, but I can’t judge for myself whether it can obtain a hotel business license.”
“I don’t have time to do specialized research into zoning designations, fire codes, and the like.”
“I want to consult about a plan to start with Special Zone Minpaku and transition to a hotel business license in the future.”
Whatever your concerns, please feel free to consult with us.
We at Stay Buddy Co., Ltd. are a professional group operating numerous minpaku and lodging facilities throughout Osaka City, with extensive experience obtaining both Special Zone Minpaku certification and hotel business licenses.
We offer the following:
- ① A free simplified assessment, from a legal perspective, of whether a property you’re considering has the potential to obtain a “hotel business license.”
- ② Leveraging our network of specialists, including architects and administrative scriveners, to present a concrete roadmap and cost estimate for obtaining the license.
- ③ Advice on whether you should start with Special Zone Minpaku or the hotel business, offering the optimal strategy tailored to your business’s stage of development.
Prepare for an uncertain future while building a reliable foundation for revenue.
We will fully support you in taking this crucial “first step” of property selection. As the saying goes, better safe than sorry—please don’t hesitate to reach out to us for a consultation.
