Short-term lets: business and regulatory impact assessment

I: Competition Assessment

194. Where short-term lets continue to operate, the legislation will improve competition by ensuring basic safety standards are applied in all accommodation. (This removes the "cheat's advantage".) It will increase hosts and operators' incentives to compete vigorously on discretionary quality considerations such as guest comfort and unique selling points. As was set out in section F and section G3, we do not anticipate that introduction of the licensing system will impose a disproportionate burden on short-term let hosts and operators.

195. In some areas, local authorities may choose to implement control areas specifically to reduce the number or manage the growth of short-term lets and this could be expected to increase demand for hotel accommodation in these areas. However, local authorities will not want to overregulate the sector. Every local authority welcomes the contribution to the local economy from visitors and local authorities compete to attract visitors to Scotland to their area. Local authorities will use their new powers to find the right balance between the interests of local residents and communities and their wider tourism economy. It will be for local authorities to consider this impact in detail as and when they use the powers.

196. The legislation should not adversely impact Scotland's competitiveness. The legislation will provide greater assurance to foreign visitors about their stay. It should improve Scotland's reputation as a place to stay.

Will the proposal directly limit the number or range of suppliers? No

Will the proposal indirectly limit the number or range of suppliers? Yes – see paragraph 195 above.

Will the proposal limit the ability of suppliers to compete? No

Will the proposal reduce suppliers' incentives to compete vigorously? No