Over 30 percent of guesthouses run out of private homes and apartments were operating illegally as of late last year, results of a Ministry of Health, Labor and Welfare survey released on March 1 show.
The survey ran from October to December 2016, and covered some 15,000 accommodations listed on a guesthouse search website. The listings were checked to see if the operators had received municipal government authorization as stipulated under the Hotel Business Act.
The ministry found that 31 percent of guest houses were unlicensed, while 53 percent did not publicly list their exact location, so their legality could not be determined. Only 17 percent of the guesthouses were confirmed to be operating legally. However, of accommodations listed in Tokyo's 23 wards and other city centers, the figure was just 2 percent, with 33 percent operating illegally and 65 percent falling into the indeterminate category.
To deal with the situation, the government is aiming to enact a new law on guesthouse businesses during the current Diet session. The new legislation would expand the number of government-recognized guesthouses through a registration system. At the same time, the government is looking to toughen guesthouse regulations through revising the Hotel Business Act, including raising the current maximum fine for unlicensed accommodations from 30,000 yen to 1 million yen.