June 8 (UPI) -- Online lodging company Airbnb said it's been forced to scrap thousands of reservations in Japan this month after it was blindsided by the government in Tokyo.
Airbnb said in a statement Thursday the Japanese government suddenly announced last week that hosts without a license number cannot take reservations. The announcement affects bookings made before June 15.
The cancellations affect bookings in Japan between June 15 and June 19, Airbnb said. The company said it will refund reservations with an unlicensed host within 10 days of the guest's arrival.
The move is tied to new laws in Japan that require hosts to register their listing and display a license number in order to stay active on Airbnb's platform. Many hosts who were forced to cancel reservations had tried to register or are still waiting for their licenses, the company said.
Airbnb, which matches lodging hosts with travelers, called the decision a "surprise" and said the Japan Tourism Agency was unwilling to make "reasonable compromises" to protect visitors.
"This is understandably frustrating, especially since many hosts are close to acquiring their license. It's particularly disruptive for guests who have a trip to Japan planned for the weeks and months ahead," Airbnb said.
"We are incredibly sorry. We know this stinks -- and that's an understatement."
Airbnb said it will establish a $10 million fund to cover additional expenses for the guests who've had to interrupt their travel plans. Additionally, it will give affected guests a coupon worth at least 100 percent of the booking value to use on a future trip.
"We believe the new rules will ultimately be a positive change for Airbnb and our Japan community," the company said. "There will undoubtedly be a period of adjustment, but ultimately, clear rules and regulations for home sharing will make our community in Japan bigger and stronger."