Short-term lets: business and regulatory impact assessment

Annex E: Principal concerns of the ASSC

In their consultation response, the ASSC included the following concerns about the impact on self-catering businesses at sections 4 and 5:

4. Why businesses will close

There are many obvious reasons why owners will close businesses under the proposed scheme:

4.1. Uncertainty over licence being granted: councils will have very subjective grounds to refuse licence – and could grant a licence then refuse renewal. Appeals against refusal would involve substantial legal costs and more uncertainty.

4.2. Owners will have to make advance bookings made during the licence application period conditional on licence being granted (which will put off guests) or risk being sued if they don't andlicence not granted – and this will be repeated every 3 years when licence must be renewed.

4.3. Increased bureaucracy and hassle: disproportionately affecting small business owners who are the backbone of Scotland's tourist economy.

4.4. Investment uncertainty: owners will be reluctant to invest in major repairs, replacements and improvements as they won't know whether licence will be granted or renewed.

4.5. Uncertainty as to ability to access and afford qualified contractors to ensure compliance.

4.6. Uncertainty as to impact on mortgage and insurance liabilities.

4.7. Unknown and open-ended licensing costs, realistically estimated as £1k plus – councils must recover their costs from the scheme and operators will face additionally paying the council for inspections.

5. The consequences

5.1. Introducing licensing will result in significant damage to Scotland's tourist industry, including the businesses that provide services to property owners, and, in turn, to local economies. The irony is that the Scottish Government are pushing ahead with this when we are trying to recover from the economic damage of Covid-19 and when staycations are being encouraged for sustainability and environmental reasons.

5.2. Given the competition to maintain standards, holiday let owners often spend money more frequently on additional property maintenance than they would on their own property. Their guests spend money in local food shops, cafes, gift shops, galleries, restaurants, tourist attractions etc. – many of which would simply be unviable without visitor spending.

5.3. Therefore, the impact of the regulations will not be limited to self-catering as there will be a significant negative impact to businesses in the wider supply chain. This emphasises the valuethat short-term letting provides to the wider economy from the operators themselves, withnegative knock-on effects on hospitality, local activity providers and local attractions. There willalso be a negative impact on laundry providers and cleaning services and guests.

5.4. Overall, it is vitally important to see the regulations in a holistic context, not just as an issue for housing and local government, but one for tourism, economy and Covid recovery. The Scottish Government should be looking to help support small tourism businesses like self-catering as it recovers from Covid-19, rather than introducing a disproportionate licensing scheme, especially as viable, workable alternatives such as mandatory registration are available.

6. All this could easily be avoided. Our registration proposal allows for the Scottish Government to introduce licensing, but to exclude registered accommodation. A register could be introduced viathe Development of Tourism Act 1969, delivered by Visit Scotland. Professional operators, DMOs,VisitScotland quality assurance members, as well as members of the ASSC and Scottish B&BAssociation could register and become exempt thus avoiding business closures and the knock-on consequences.