A report from Nikkei Asian Review has revealed that an “adjustment period” is the cause of mass cancellations of Airbnb bookings in Japan as divulged by the home-sharing platform’s co-founder.

“There have been some challenges in a short time because it is an adjustment period, but we can get through that,” Nathan Blecharczyk, Airbnb’s co-founder and chief strategy officer.

Japan’s home-sharing law took effect yesterday, June 15, requiring hosts to register in order to regulate an industry that has been operating in a legal gray zone.

The Japan Tourism Agency on June 1 demanded the cancellation of bookings for rooms that had been officially registered. Soon afterward, Airbnb pulled nearly 50,000 properties, an 80% of its listings in Japan, because the hosts had yet to complete the registration process under the new law.

The new legislation, known as the minpaku law, is intended to simplify procedures for hosts by having them register with local authorities, rather than treating them as inn operators and forcing them to obtain permits under the hotel business law.

Airbnb has said it is cancelling bookings of properties that remain unregistered within 10 days of arrival.

“Our primary focus is to take care of guests,” he said, referring to the creation of a 1.1 billion yen ($10 million) fund to compensate travelers for booking fees and flights.

Seeing a rosy future especially with the surge of tourist arrivals ahead of the 2019 Rugby World Cup and the 2020 Tokyo Olympics, Airbnb intends to invest $30 million to promote home-sharing in Japan, including the partner strategy and educational programs to help hosts register under the new law.