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Web-Based Accommodation Providers: Friend or Foe to Scottish Hospitality?

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Web-Based Accommodation Providers: Friend or Foe to Scottish Hospitality?

Web-Based Accommodation Providers: Friend or Foe to Scottish Hospitality?
June 13
13:58 2019

Murray Rankin

With recent data indicating that between 2014 and 2017, the number of Airbnb listings in Edinburgh increased almost 500%, from 1,900 to 9,000, the relentless rise in popularity of the short-term lettings phenomenon has been nothing short of remarkable. In the Highlands, the rise has been even more dramatic; five years ago there were just 280 properties on Airbnb’s books and within three years this had risen to over to 3,o00 (a 1,107% increase).

Murray Rankin examines the effects that web-based accommodation providers are having on hotels and guest houses in some of Scotland’s key visitor destinations…

Clearly, the ‘relocation’ of more than 1m guests in Scotland in 2017 has made a huge impact on hotels and similar businesses. With the well-documented pressure on hotel rooms in some of those areas of Scotland that are most popular with visitors, it could be argued that holiday letting platforms such as Airbnb enable visitors (and the income they generate) to come to Scotland when they would otherwise struggle to find affordable places to stay at the busiest times of the year.

However, the use of properties as short-term lets has proved controversial. With more and more being bought solely for the purpose of being let out on a short-term basis, some residents have complained that their sense of community is being eroded as transient groups of tourists and visitors are brought into previously private residential streets and buildings. The increase in house prices it creates has been credited with pricing out first-time buyers and local people, as well as contributing to the shortage of housing stock in areas already under pressure. Additionally, there is criticism from hotel operators that the lack of comparable regulation of short-term lets gives their operators a comparative advantage.

Airbnb in Dundee: Interest in letting flats and homes on a short-term basis has contributed to a rise in the city’s property values

Airbnb and other similar accommodation platforms often operate in a planning and legal grey areas due to their unique approach, and authorities around the world have only recently begun to regulate the use of peer-to-peer accommodation services. The Danish Government introduced country-wide restrictions in 2018, while in Greece, the government restricts hosts to letting out up to four properties each, which must all be above 9m2 and provide natural lighting, ventilation, heating, and furnishings.

A number of North American cities, meanwhile, have introduced regulations at the municipal level, including occupancy taxes, the requirement for properties to have a permit for use as a short-term let and a definition itself (typically rentals of fewer than 28 consecutive days).

Scotland has yet to adopt any measures to balance the benefits that platforms like Airbnb can bring, while also protecting the interests of communities and local residents. The potential for restrictions to be enforced through planning authorities has been proposed for inclusion in the ongoing Scottish planning reform. However, with the way forward for the Planning Bill currently unclear the Scottish Government has pressed on along other avenues to attempt to find a resolution.

Glasgow City Council has attempted to maintain some control of the practice through the planning system, and the most recent local development plan provided guidance on the use of residential properties for this purpose. Planning permission is consequently required in a flatted property when it is not the main residence of the owner and the entire premises is being advertised for short-term let.

Houses are generally treated differently to flats and are unlikely to require planning permission for short-term letting use

Properties currently operating without planning permission that are deemed to require it run the risk of being served enforcement notices and shut down by the local council. In Edinburgh and Glasgow, a number of properties have been served with enforcement notices in recent years, often resulting in them ceasing operation as a short-term let. Highland Council are looking to follow suit, and it is no coincidence that the areas that are actively looking to control the growth of short-term lets are those with the highest number of listings on Airbnb.

In April 2019, a Scottish Government consultation was opened to canvas the views of the public, accommodation sector, short-term let hosts, and other stakeholders in order to try and find a system of regulations that might achieve this balance. The Government previously established the Scottish Expert Advisory Panel on the Collaborative Economy, which highlighted both sides of the debate and made a number of recommendations about some measures that could be implemented.

The recommendations included:

  • Platforms should make a greater commitment to providing upfront information
  • There should be clear routes to making and escalating complaints
  • Hosts letting out their property on a digital platform must be shown, and indicate acceptance of, local rules and regulations regarding the use of properties as a short-term let
  • Platforms provide hosts with guidance on their income, business and council tax liabilities
  • Health and safety thresholds should be updated to specifically refer to peer-to-peer accommodation
  • Details of the consultation can be found on the Scottish Government’s website. Responses can address as many or as few of the questions as desired. Responses can be emailed, posted, or submitted online to the Scottish Government, until 19th July 2019.

Murray Rankin is a graduate planner at Graham and Sibbald, whose team of specialist chartered surveyors work extensively in the Scottish hospitality sector, advising and assisting clients on all aspects of commercial property transactions. Visit www.g-s.co.uk for more information. For planning requirement enquiries regarding short-term lets, contact planning@g-s.co.uk or visit www.g-s.co.uk.

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Catering Scotland

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