Guesthouses for foreigners businesses in the inner city and their neighborhood impact: The case of North Nishinari, Osaka City

The aim of this paper is to examine the characteristics of guesthouses (GH) in the inner city and to discuss their impact on the local community and real estate market. Company X, which runs eight GH buildings in Osaka City's North Nishinari area, is used as an example, and based on a sample of 30 residents the business strategy for this area was analyzed. Because of its poor reputation and the low living quality standards, North Nishinari is not popular among younger residents and is turning more and more into a welfare district for elderly people. Against this background, Company X initiated its GH business, in order to bring younger residents into the area. The comparatively simple-to-start GH business is a new business model for landlords with little! private capital unable to participate in the welfare business. GHs provide a living environment and services that encourage foreigners to move in, appealing especially to people who stay for a fixed period of time in Japan, like working holiday makers and foreign students. The characteristics of these GH residents are that most of them are foreigners from Asian countries, more than half of them are male, and they are employed in part-time jobs. These findings show that by following a clear business strategy in line with the conditions of the inner city, Company X attracts a distinctive type of residents, differing from guesthouse residents in other areas. However, this inner city business strategy influences: the GHs capability to contribute to the local community. Its effect in solving the increasing social isolation in the local community is low, because the GH residents are not original members of this community. Furthermore, interactive events between guesthouse residents and members of the local community, necessary for a wider contribution to the local community, were stopped, because they had no direct effect on profits. The example of Company X shows that the guesthouse business in the inner city has the capacity to revitalize the real estate market by making effective use of old vacant housing, but its impact on the social issues of the local community is quite limited.