The number of private properties for vacation rental in Japan has declined as the COVID-19 pandemic significantly lowered the travel demand, dashing hopes for more foreign visitors during the Tokyo Olympics and Paralympics, local media reported Sunday.

According to data released by the Japan Tourism Agency, the number of vacation rental homes and apartments registered under Japan's law on private lodging business as of July 12 has decreased to 18,578 from a peak of 21,385 in April 2020.

In fiscal 2020 through March this year, people stayed in those private lodgings declined to only about 1.14 million, dropping 77 percent from the previous year.

Since the Japanese government passed a law that legalized private lodging in June 2018 for relieving a shortage of hotel rooms, this business, known in Japan as "minpaku," has grown with an inbound tourism boom.

Before the COVID-19 pandemic spread globally in early 2020, registered private lodgings surged at a pace of several hundred units per month with growing concerns over a shortage of accommodation during the Tokyo Games especially in Tokyo, Osaka, and other major cities.

The decision to postpone the Tokyo Olympics and stage the Summer Games mostly without spectators amid the spread of the COVID-19 infections has severely dragged down the private lodging industry.

According to a survey, 49 percent out of 289 polled lodging operators reported the closure of their businesses from September to October 2020 as they could not expect to make any profit.

As the COVID-19 pandemic continues, foreign tourists, the main customers of minpaku facilities, are still unable to enter Japan. The lodging operators see no signs of a recovery in tourism demand.

The "Go To Travel" subsidy campaign, which was initiated by the government to boost domestic tourism and covered private accommodation, has been suspended nationwide since December 28, 2020 due to a resurgence of coronavirus infections.

Some local governments are providing travel discount campaigns in their own regions, but these only cover hotels and inns, excluding private lodgings.

The Japanese government plans to conduct a survey by March next year on the use and management system of vacation rentals with a possible review of the lodging system. The envisioned review would consider legal restrictions on private lodgings, such as the 180 days per year limitation of accommodation offering.