Unlocking Property Potential: Japan’s Vacation Rental Pros and Cos Revealed
2023.10.22
The vacation rental business is booming, driven by an influx of international tourists and growth in Japan’s domestic tourism industry. Considering stepping into the vacation rental arena? You’re not alone!
This article dives deep into the best search engine sites for vacation rentals, such as Airbnb and Booking.com. We rank these popular booking platforms based on their fees, customer reach, and target demographics.
But first, what is an OTA? For those new to the term and the best ways to utilize these websites, we’ve got you covered.
What is OTA?
OTA stands for Online Travel Agent. Essentially, it’s an online booking platform.
These platforms have recently become synonymous with vacation rentals in Japan and are often termed “vacation rental sites”.
With the convenience of smartphone and computer access, using OTAs to book vacation rentals online has become the norm.
Why should property owners in Japan consider leveraging these platforms? Here are some compelling reasons:
①Boost Visibility
: Nowadays, 48.3% of hotel bookings are made via OTAs, ensuring a wider audience reach.
②Attract International Guests
: A whopping 80% of vacation rental users are international tourists, and the vast majority book via OTAs.
③Efficient Reservation Management
: All reservations and scheduling are neatly handled within the booking site.
In today’s digital age, for anyone serious about maximizing their property’s potential in Japan, OTAs have become an indispensable tool.
Mastering the Best Vacation Rental Sites in Japan: An Investor’s Guide to Boosting Bookings!
Choosing the Perfect OTA for Your Property: Fees, Popularity, and Target Demographics
When diving into the world of vacation rental booking sites, there are three core elements to consider:
①Fees
: Beware of sites with low fees but limited visibility.
②Popularity
: Global platforms like Airbnb might charge higher fees but boast immense reach.
③Target Audience
: Your choice of OTA may differ depending on whether you’re targeting locals or international guests.
But how many OTAs should a property owner in Japan use?
For properties with a high number of rooms, we recommend registering with as many OTAs as possible.
However, if you have fewer rooms, it’s best to narrow down to 2 or 3 top sites.
With fewer rooms, accumulating reviews on a limited number of platforms can boost your visibility and increase bookings.
Typically, these platforms charge no listing fee but take a commission on each booking.
Boosting OTA Efficiency: Harnessing the Power of Site Controllers
When managing multiple vacation rental properties or OTAs, updating property info or setting prices can become tedious.
This is where site controllers or PMS (Property Management Systems) come into play.
These tools let you update property details and pricing across various booking sites, preventing double bookings and other mistakes.
Essential for every savvy property owner in Japan.
Recommended Site Controllers for Vacation Rentals
Popular choices include “AirHost” and “Beds24”.
AirHost, developed by a Japanese company, stands out for its user-friendly interface.
In contrast, Beds24, headquartered in the US, is known for its affordability and rich features.
However, no tool can manage everything, so always keep an eye on individual OTA websites.
Generally, the monthly fees for these controllers range between 3,000 and 10,000 yen.
Discover Japan’s Best Vacation Rental Sites: Top Recommendations for Savvy Investors!”
Navigating the vast sea of vacation rental booking websites?
Here’s our ranked list of the top platforms for property owners in Japan:
1.Airbnb
2.Booking.com
3.Jalan.net
4.Rakuten Vacation Stay
Especially for investors, tapping into Airbnb and Booking.com – the top two in terms of market share – can yield significant returns.
Let’s delve deeper into our number one pick:
1. Airbnb: The Gold Standard in Vacation Rental Sites
①Service Fee: 15%
②Attracting Customers: Unparalleled
③Target: Worldwide
④Types of Vacation Rentals Allowed
| Simplified Accommodation Business in the Hotel Industry (Hotel Industry Minpaku) | ○ |
| Residential Accommodation Business Law Minpaku (New Law Minpaku) | ○ |
| National Strategic Special Zone Law Minpaku (Special Zone Minpaku) | ○ |
1) Fees: 15%
Airbnb’s fee sits at a relatively higher 15% compared to other sites.
Both the host-only and split (between guest and host) fee structures are available.
However, the price is justified with its chat function, dedicated support for conflicts, and unique insurance services.
Notably, there’s no listing fee for property owners.
2) Popularity: Unparalleled
Holding over 20% of the market share, Airbnb’s clout in the vacation rental sector is unmatched.
For those on the fence, consider:
・Airbnb’s pioneer status in the vacation rental arena.
・Their clientele’s preference for unique properties over generic hotels.
Plus, with reviews accumulating faster than other sites, we advise new owners, especially with fewer properties, to start with Airbnb to boost their visibility.
3) Target Audience: Global Reach
Proud of its universal appeal, Airbnb caters to both local and international travelers.
Originating as an American startup, it’s now a global OTA icon and played a pivotal role in popularizing vacation rentals in Japan.
This positions it to attract tourists from Japan and beyond.
2. Booking.com: The Gold Standard in Vacation Rental Sites
①Service Fee: 12%
②Attracting Customers: Unparalleled
③Target: Worldwide (Primarily Western countries)
④Types of Vacation Rentals Allowed
| Simplified Accommodation Business in the Hotel Industry (Hotel Industry Minpaku) | ○ |
| Residential Accommodation Business Law Minpaku (New Law Minpaku) | ○ |
| National Strategic Special Zone Law Minpaku (Special Zone Minpaku) | ○ |
1)Fee Structure: 12%
Booking.com charges a standard service fee of 12% for property owners.
This rate is quite average among the top booking sites.
But they spice things up with optional plans:
〇Preferred Program
: 3% extra (totaling 15%) for higher listing visibility.
〇Preferred Plus
: Add 5% to the preferred program (20% in all) for top-tier visibility and bonus points for guests.
Remember, listing your property is free; owners pay no extra charges.
2)Popularity: Unparalleled
Booking.com isn’t just a global giant; it’s one of the most popular sites for foreign tourists in Japan.
Owners targeting international visitors, especially, should consider coupling it with Airbnb for optimal results.
From hotels to vacation rentals, their extensive property coverage is impressive.
Their arsenal of marketing and promotional tools is a boon for those who can harness them.
But a word of caution: with great features comes the need for meticulous setup.
3)Target Audience: Global Travelers
They target tourists from all over, but they’re especially dominant when catering to visitors from the West.
3. Jalan.net: The Gold Standard in Vacation Rental Sites
①Service Fee: 8-12%
②Attracting Customers: Good
③Target: Japan (Primarily Domestic)
④Types of Vacation Rentals Allowed
| Simplified Accommodation Business in the Hotel Industry (Hotel Industry Minpaku) | ○ |
| Residential Accommodation Business Law Minpaku (New Law Minpaku) | ✖ |
| National Strategic Special Zone Law Minpaku (Special Zone Minpaku) | ✖ |
1)Fee Structure: 8-12%
Jalan.net’s fee varies: 6-8% for single guests and 8-10% for parties of two or more.
Additionally, a 1.5% card payment fee applies.
Compared to other sites, Jalan.net often emerges as a cost-effective choice, with some payment methods offering up to 1% savings.
Moreover, listing is free; owners aren’t charged extra for displaying their properties.
2)Popularity: Good
Operated by Recruit, Jalan.net stands as a long-established OTA in Japan.
Holding second place right after Rakuten Travel, its grip on the Japanese tourist market is robust.
Jalan.net’s dual presence as a renowned travel magazine and website offers a unique promotional edge.
However, property owners should note that only traditional lodgings are accepted. Modern vacation rentals under the new law aren’t eligible.
The platform primarily hosts hotels and inns; hence, standalone and unmanned vacation rentals might not garner as much attention.
3)Target Audience: Predominantly Japanese
Originally stemming from Recruit’s travel magazine, Jalan.net focuses primarily on Japanese tourists.
4. Rakuten Vacation Stay:The Gold Standard in Vacation Rental Sites
①Service Fee: 3%
②Attracting Customers: Fair
③Target: Worldwide (Especially strong in Japan)
④Types of Vacation Rentals Allowed
| Simplified Accommodation Business in the Hotel Industry (Hotel Industry Minpaku) | ○ |
| Residential Accommodation Business Law Minpaku (New Law Minpaku) | ○ |
| National Strategic Special Zone Law Minpaku (Special Zone Minpaku) | ○ |
1)Fee: 3%
Rakuten Vacation Stay offers a competitive 3% service fee.
Furthermore, there’s no listing fee, ensuring owners can post their properties without additional costs.
2)Popularity: Fair
Rakuten Vacation Stay, an OTA presented by Rakuten, can post to major sites like Rakuten Travel, Booking.com, and Agoda.
It’s a handy solution, allowing property owners to manage multiple OTAs at once.
However, direct bookings via Rakuten Vacation Stay are notably limited.
3)Target: Global with a Strong Emphasis on Japan
A significant perk for Rakuten Vacation Stay is its ability to list on Rakuten Travel, primarily targeting the Japanese market.
While it can post on major global OTAs like Booking.com and Agoda, its multilingual support is lacking, making it less appealing for foreign tourists.
Maximizing Direct Bookings: An Insight for Foreign Investors in Japan’s Property Sector
While OTAs (Online Travel Agencies) are superb for efficiently drawing tourists from abroad, there’s a catch: fees can exceed 10%.
Hence, driving guests to book directly via your site is crucial.
In fact, data reveals about 20% book directly with the accommodation, promising substantial revenue.
Enticing Direct Reservations
To increase direct bookings through your vacation rental site in Japan, incentivizing repeat guests is pivotal.
Offer perks for bookings made on your site, such as a “complimentary drink” or “5% off on stay.”
To make your site more attractive, incorporate engaging property photos, videos, and highlight nearby attractions.
Ensure your website has a seamless booking mechanism; an efficient reservation form is key.
Leverage Social Media
SNS (Social Networking Sites) play a significant role in acquiring new customers and retaining old ones.
Given the rise in users seeking property information on platforms like Instagram and Twitter, having an account is recommended.
Ensure your profiles link back to your site and use captivating hashtags like “#Onsen” and “#NearStation” to appeal to your audience.
Gradually guide repeat guests to your site with engaging content.
Conclusion
There’s a plethora of vacation rental sites, each with its distinct features.
While our site provided a ranking of the best OTAs, don’t fixate on ranks.
Instead, tailor your choice based on your property’s target audience and budget.
For those aiming for large-scale operations akin to hotels, leveraging multiple OTAs using site controllers or “Rakuten Vacation Stay” is suggested.
For smaller operations, starting with popular sites like Airbnb and Booking.com is ideal.
For individual owners, focusing on repeat guests rather than extensive marketing for direct bookings is advisable.
At Kuukan Inc., with our experience in managing over 100 vacation rentals in 13 locations throughout Hokkaido, we can offer optimal OTA operations and strategies.
Hokkaido has become a prime investment destination with an increasing demand for vacation rentals, having welcomed over 1.4 million tourists in 2019.
If you’re interested in vacation rental management in Hokkaido, please don’t hesitate to contact Kuukan Inc.
