What Is a Registered Home-Stay Management Business? When Outsourcing Is Required and How to Choose One

When Is Outsourcing to a Registered Management Business Mandatory? A Field-Based Look at the Rules and How to Choose a Partner

Before deciding who to outsource your property’s management to, you first need to answer a more basic question: is outsourcing optional, or is it required by law? We’ve seen real cases where owners launched their operations based on a misreading of the Private Lodging Business Act (Minpaku Shinho), only to be told later that corrections were needed. At Stay Buddy, when owners come to us for advice, we often start by clarifying whether outsourcing is even required in their situation.

When Outsourcing Becomes a Legal Requirement

Under the Private Lodging Business Act, if a registered property will be unoccupied during guest stays, the owner is legally required to delegate management to a registered housing accommodation management business. This applies specifically when the property isn’t the owner’s primary residence, or even when it is, if guests will be staying there while the owner is away. According to the Japan Tourism Agency’s outline of the system, “host-absent” style minpaku operations generally require full outsourcing to a registered management business.

On the other hand, in “host-present” operations—where the owner lives in the same building or on the same premises—owners may be able to handle management duties themselves, provided certain conditions are met. That said, exactly where this line falls depends on the property’s layout and how it’s actually used, so we always recommend checking with your prefectural, designated city, or core city government office before filing your notification.

What Does a Registered Housing Accommodation Management Business Actually Do?

A registered housing accommodation management business is a company registered with the Minister of Land, Infrastructure, Transport and Tourism under the Private Lodging Business Act, authorized to handle management duties on the owner’s behalf. The scope of management work defined by law includes guest guidance and explanations, responding to neighbors, hygiene management, and maintaining facilities and equipment. You can verify whether a company is properly registered by checking the official list published by the Ministry of Land, Infrastructure, Transport and Tourism.

This is a different system from facilities operating under a Hotel Business Act license (such as ryokan, hotels, or simple lodgings). Don’t confuse properties registered under the Private Lodging Business Act with those licensed under the separate Hotel Business Act framework—they rest on different legal grounds. Also note that fire safety equipment requirements under the Fire Service Act apply independently to properties under either law.

A Real Example from the Field: Lessons from Switching Management Companies

One owner once asked us to take over the handover process when switching from their previous management company to Stay Buddy. The sticking point turned out to be the cleaning contract. The previous company had contracted directly with a cleaning service, and had never shared the cleaning staff’s contact details or pricing with the owner. As a result, on the very first checkout day after the switch, there was no cleaning arranged at all, and we had to scramble to bring in staff on the spot.

That experience taught us to always advise owners to check, before signing anything, exactly how much information a management company will disclose about cleaning, key management, and emergency contacts. Anyone could end up switching management companies at some point, and whether operations will keep running smoothly through that transition is a risk that’s hard to see until you’re already in the contract.

How to Choose a Housing Accommodation Management Business: 4 Key Criteria

Registration Status and Service Area

Being registered with the Minister of Land, Infrastructure, Transport and Tourism is the bare minimum requirement. Ask for their registration number and check it against the publicly available information from the Ministry. You should also confirm whether they can genuinely provide on-site support in your property’s location—even registered companies may not be able to respond quickly to emergencies outside their actual service area.

Fee Structure and Transparency

Management fees generally fall into two categories: a percentage of revenue, or a fixed monthly rate. With percentage-based fees, the actual amount can vary significantly depending on location, occupancy rate, and which platforms are used. As a rough benchmark, many companies charge somewhere in the range of 15–30% of revenue, but since what’s included varies from company to company, you can’t compare providers on rate alone. Be sure to ask, item by item, whether cleaning fees, linen costs, and OTA commissions are included in the management fee or billed separately.

Neighbor Relations and Emergency Response

Under the Private Lodging Business Act, handling complaints from neighboring residents is an obligation of the management business. Late-night noise complaints, lockout issues, sudden equipment failures—how often these emergencies come up depends on the property’s location and occupancy, but they’re far from rare. Before signing a contract, ask specifically whether the support line is available 24 hours a day and whether someone can actually be dispatched on site.

How Occupancy and Revenue Reports Are Presented

Occupancy projections a management company offers you will vary widely depending on the season, location, and property type. Be wary of any company that leads with an unqualified number like “average occupancy guaranteed at X%” without context. A trustworthy company should be able to explain, at least to some degree, seasonal fluctuations, the competitive landscape, and the reasoning behind their pricing strategy. It’s also worth confirming what’s included in monthly reports and how often you’ll receive them—this makes communication much smoother once operations are underway.

Get in Touch with Stay Buddy for a Free Consultation

Stay Buddy is a registered housing accommodation management business that operates properties registered under the Private Lodging Business Act on behalf of owners. Our on-the-ground team handles everything from cleaning and pricing to neighbor relations and OTA management, all under one roof. We’re happy to talk with you even at an early stage—whether you’re not sure if outsourcing is required, or you’re considering switching from your current management company.

Once we understand your property’s location, type, and current occupancy status, we can give you concrete guidance on whether outsourcing is necessary, what fees to expect, and how to handle the transition. If you’d rather talk about your actual property than general theory, feel free to reach out.

Your first consultation is completely free. We look forward to hearing from you, whether through our contact form or by phone.