Month: January 2021

The European Holiday Home Association which is a united voice for short-term rentals (STR), would like to address its deep concerns regarding rushed legislative process on the Scottish Licensing Order and the Control Area Regulations for short-term rentals (STR).

The United Kingdom left the European Union on 31 January 2020, however, taking into account Scotland’s positive attitude towards the EU, we would like to highlight that the proposed laws are against the European Union’s law and guidance[1] and it does not respect the EU core principles such as freedom to provide services, proportionality and justification of measures being planned to be imposed on the sector.

Short-term rentals are a consumer driven phenomenon. One of the primary contributions of the short-term rental is that people can generate additional income on an occasional basis without becoming a professional service provider. Second, entrepreneurs can easily interact with distribution channels and access new customers, generating more jobs and taxes and direct economic impact for local communities. Third, communities can reap the full benefits of tourism through short-term rentals that disperse tourists to wider areas, helping to accommodate them in places where there are only few accommodation options available or there are none. As a voice for the short-term rental sector, we are convinced that STR sector contributes to innovation, boosts entrepreneurship, provides bigger choice for consumers, drives competition, and positively contributes to the environment[2]. According to the EHHA member, the Association of Scotland’s Self-Caterers, short-term rentals are the backbone of the Scottish tourist industry which is worth in excess of £723m in a normal year (before COVID-19) excluding the very considerable direct and indirect impact businesses and their guests have on local economies.

While we understand the need to regulate STR services where it is justified, and we support a harmonised framework, we believe that everybody is best served by free and open competition based on clear, proportionate and non-discriminatory principles.

As a STR sector, we are absolutely against the Scottish government’s intention to immediately apply a measure of last resort – introduce licenses and control areas for STR, especially during the time of the COVID-19 pandemic.

There is not widespread support for the introduction of this legislation across Scotland. EHHA member, Airbnb, recently commissioned ORB International to research Scottish voters’ opinions on the tourism sector and short-term lets. The findings could not be clearer: a strong majority of Scottish voters want their government to help the tourism industry rather than hampering it with regulations:

• 72% of Scots say that, until the pandemic is over and the state of the economy is clearer, the Scottish government should pause any new regulations that would hurt the economy or the tourism sector.
• 91% of Scots believe tourism will be central to Scotland’s recovery from the pandemic.
• 67% called on the government to focus on policies that will boost tourism in the wake of the pandemic.
• 53% of voters want the government to abandon or delay the plans until coronavirus is under control and Scotland’s economy is stable.
• Just 35% believe the government should go ahead with its current plans.

As a sector, we urge the Scottish authorities to objectively assess the nuance and complexities of the sector[3] , take into account the continuous impact of COVID-19 on the Scottish tourism and, more precisely, STR sector in Scotland, consider valuable work done by the European Commission, stakeholders and EU Member States on the topic and shift away from the proposal to apply the most extreme measures (introduce licenses and control areas for STR) without any necessity and/or justification up until the results of the European Commission’s study on STR registration schemes are published (expected by the end of February 2021).

Last year, European Commission commissioned a study on “National Regulatory Approaches to Short Term Accommodation Services”. The overall aim of this research is to map different registration schemes imposed on STR providers across Europe in order to assess their impact on a variety of groups and suggest a “Holy Grail” registration scheme that would help to achieve the policy objectives and at the same time would be proportionate on STR providers. EHHA urges the Scottish government to delay rushed legislative process and instead of applying unnecessary and unjustified measures of last resort (such as introducing licenses and control areas for STR), take one step at a time in these turbulent COVID-19 times: the Scottish authorities shall explore other, less restrictive measures, such as introducing a simple, easy to comply, immediate, free of charge registration system. For example, due to an online and easy to comply national registration system, STR hosts in Portugal contributed to the Portuguese budget by 19 million EUR in taxes in 2019.

We are in an agreement with the European Commission[4]  that a step-by-step approach to regulate short-term rentals when it is justified and proportionate should be in place. The introduction of each more far-reaching step is only possible if the previous step has been taken and clear evidence shows that taking the next step is necessary and proportionate to achieve the policy objectives.

EHHA highlights that politically inflamed accusations that short-term rentals impact availability and affordability of housing is too one-dimensional in a multi-faceted and complex discussion. Issues such as increasing urban population (according to Eurostat, ¾ of the EU population lives in urban areas and it will grow to 80% by 2050), ageing society, migration and mobility flows, 2008 financial crisis and challenges for regional/local authorities to address and manage these have led to the housing situation we have today. EHHA encourages the Scottish authorities to shift away from politically infused accusations targeted to short-term rentals and look at the evidence based wider picture in order to address the housing challenges in a suitable way[5].

EHHA understands that even though tourism provides a main source of income, some cities faced challenges with scale and form of tourism before COVID-19 crisis. EHHA highlights that if one country/region/city or specific area within a city may be suffering from a high number of tourists, the other may be struggling to attract tourists at all. Banning or imposing restrictive policy measures with bias against short-term rentals without assessing the variety of factors that contribute to context – and city-specific issues, raises a question of suitability of the law[6] as targeting solely short-term rentals would not contribute meaningfully to overall policy goals.

THE IMPACT OF COVID-19:

According to UNWTO[7], 2020 was the worst year in tourism history with 1 billion fewer international arrivals. Europe recorded a 70% decrease in arrivals, despite a small and short-lived revival in the summer of 2020. According to UNWTO, the region suffered the largest drop in absolute terms, with over 500 million fewer international tourists in 2020. UNWTO’s now foresees that it will take two-and-a-half to four years for international tourism to return to 2019 levels. The Association of Scotland’s Self-Caterers estimates that self-catering sector has lost £265m due to COVID-19 restrictions since September 2020 alone[8]. This figure does not even consider the footfall generated by self-catering visitors in local businesses, hospitality venues and visitor attractions.

STR sector amongst other tourism stakeholders was severely impacted by the COVID-19 crisis. However, taking into account the STR business models and social distancing rules applied to avoid the spread of COVID-19, we see that tourists now more than ever prefer staying at short-term rentals, as they are safer than crowded buildings. We are convinced that putting rushed, unjustified, unproportionate and untimely restrictions on short-term rental activities will lead to limitation of consumers’ choices and will distort the economy. It is worth recalling that the Commission in its recent guidance[9]  did not list short term rental facilities as a space of an enhanced possibility of virus transmission – short term rentals do not generate large gatherings of people for long periods of time, there is no or very little interaction with other tourists or people, they do not have public spaces used by a number of other tourists, such as lobbies, etc.

It is essential to note that short-term rentals may also contribute to mitigate the social effects of the COVID-19 crisis, since they may allow its owners additional income and better use of existing resources. We may think of an employee of a hotel, a restaurant or a touristic area who has unfortunately lost their job and may wish to rent a room in their dwelling in order to obtain some additional income.

The safety and well-being of our guests, employees, hosts, entrepreneurs, property managers, property owners and the wider community remains our top priority and for this reason EHHA members have proactively worked on enhanced cleaning and prevention policies that are based on recommendations already made through the EU institutions, the European Centre for Disease Prevention (ECDC), the World Health Organization (WHO), the World Travel and Tourism Council (WTTC), as well as national and local authorities.

As a sector, we urge the Scottish authorities to objectively assess the nuance and complexities of the sector[10], take into account the continuous impact of COVID-19 on the tourism and, more precisely, STR sector in Scotland, consider valuable work done by the European Commission, stakeholders and Member States on the topic and shift away from the proposal to apply the most extreme measures (introduce licenses and control areas for STR) without any necessity and/or justification up until the results of the Commission’s study on STR registration schemes are published (expected by the end of February 2021).

We are committed to continue working in good faith with the Scottish authorities at all levels to help develop and facilitate an enforcement of an adequate, fair and simple regulatory framework.

We remain at your disposal should you have any questions or wish to have any further discussion.

Sincerely,

 

Carlos Villaro Lassen

Secretary General, EHHA

 

[1] Summary of Workshops on short-term accommodation rental services discussed during conference, https://ec.europa.eu/docsroom/documents/32062: European Commission notes that “Introducing a simple central online registration system for accommodation providers can constitute a proportionate policy response where collaborative short-term accommodation rental services negatively impact housing policy objectives or endanger the protection of the urban environment.”

[2] Real Estate Market Advisory Group of the United Nations Economic Commission for Europe (UNECE) in its Policy Framework for Sustainable Real Estate Markets, http://www.unece.org/index.php?id=52550, notes that contrary to the widespread belief that real estate sectors have negative impact on sustainability, they can actually contribute to the achievement of the UN Sustainable Development Goals. UNECE points out that the real estate sector is one of the main contributors to inclusive and sustainable economic growth as it contributes to the conversion of unused or underused resources into productive capital, hence increasing employment and other economic opportunities and reducing poverty (SDG 1, SDG 8, SDG 11 and 12). The framework even highlights that collaborative economy is one of the criteria helping the real estate sector to contribute to inclusive and sustainable economic growth.

[3] EHHA Roadmap for the Short-term rental sector, website: https://ehha.eu/vision/

[4] Summary of Workshops on short-term accommodation rental services discussed during conference, https://ec.europa.eu/docsroom/documents/32062

[5] Following the TFEU and the Services Directive, justifications for imposing any policy and regulatory restrictions in collaborative short-term accommodation rental services must be supported by clear evidence that this general interest needs to be protected (housing) and evidence of the causal link between collaborative short-term accommodation rental services and the protection of the general interest exist. In addition, any restrictions of market access or of the exercise of a certain service activity must still be proportionate.

[6] ECJ Case C‑377/17 of 4 July 2019, website: http://curia.europa.eu/juris/document/document.jsf;jsessionid=6CA03958B344BE806B9444D00E377B14?text=&docid=215785&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=800712

[7] UNWTO “2020: Worst year in tourism history with 1 billion fewer international arrivals”, 28 Jan 2021, website: https://www.unwto.org/news/2020-worst-year-in-tourism-history-with-1-billion-fewer-international-arrivals

[8] The figures from Frontline Consultants are available to view here: https://www.assc.co.uk/wp-content/uploads/2020/12/ASSC-SectoralSurvey-on-Impact-of-Covid-19-Restrictions-December-2020.pdf

[9] EU Guidance for the progressive resumption of tourism services and for health protocols in hospitality establishments: https://ec.europa.eu/info/files/covid-19-eu-guidance-progressive-resuming-tourism-services-and-health-protocols-hospitality-establishments_en: “Businesses in the tourism sector generally offer products and services that generate gatherings of people in closed (hotels, restaurants, coffee shops) and open (campsites, beaches, pool areas) spaces for long periods of time, enhancing the possibility of virus transmission.”

[10] EHHA Roadmap for the Short-term rental sector, website: https://ehha.eu/vision/

Next Wednesday, 3rd February 2021, The Local Government and Communities Committee meets to decide the fate of what they describe as Short Term Lets in Scotland. I say decide the fate, because the suggested legislation, will probably beat the last breath out of my industry, already on its knees due to Covid-19. I sincerely hope that the seven members of the Committee will ask for the legislation to be withdrawn so that there’s an opportunity to pause and reflect on the best way forward. What no one is talking about though is how short term or holiday lets are vital to sustainable tourism in Scotland.

The real problem is that the legislators have taken the problem of party flats in Edinburgh (and where they exist, they are definitely a problem for their neighbours) and assumed that every self catering property in the land, from the glens of the Highlands, to the shores of our islands, the streets of our cities and the valleys of our Lowlands, behaves just like those party flats in Edinburgh and therefore needs to be licensed and regulated. They’ve completely missed the big picture, have obsessed over one detail and are potentially about to throw thousands of livelihoods, as well as the planet, under a bus as a result.

Simple, effective and affordable registration solutions which take into account the need for health and safety have been suggested by my industry association the ASSC. But they’ve been rejected in favour of licensing that will be more onerous and costly than licensing a pub and which our councils cannot afford to operate. 49% of owners, many rural, owners of holiday lets said they’d close if the legislation passes in a 2020 ASSC survey.

Sustainable Tourism – Surely The Future of Our Planet Is Crucial?

Many things about this infuriate me. But the worst, for me and more importantly my children’s generation, is why the Scottish Government should be attacking an industry which is good for the planet? Staycations, holidaying at home, not getting on a plane will all make a big difference to our footprint on earth. And not just during Covid-19 but always. It’s something we are all reflecting on and thinking differently about as we witness our planet in crisis. Self catering homes are a solution to sustainability, not a problem. But that’s not ever mentioned or considered in this legislation. It’s truly depressing.

Dickins Response To The Committee

So, this morning I woke up early and wrote to the committee members. Here’s my email to them.

I’m writing to you ahead of the Local Government and Communities Committee meeting this coming week to decide on Short Term Letting legislation.

I understand that there have been over 300 submissions to the committee and that of the 186 which were published by yesterday afternoon, 167 are against the proposed legislation and just 14 in favour. 12 of the 14 submissions in favour are from Edinburgh.

I think the really important message is that if this legislation is passed without amendment, it won’t just close down the party flats in Edinburgh that have had such widespread coverage in the news and no doubt created emails in your inbox, it will close tourism across large parts of Scotland. That’s what those 167 submissions are essentially telling you. I hope you’ve read many of them because they are telling you very important things.

When this legislation came into the public realm, my initial concern was for my own business Dickins, 23 years in the making, my owners, my staff, our housekeepers and trades. We’ve always acted with decency and put neighbours before profit. We don’t overfill flats, don’t use lockboxes or advertise sofabeds or very short stays. But now, I’m equally concerned for decent professionals and owners like me, across Scotland and especially in our rural areas. This is about so much more than my business in Edinburgh.

Looking at the legislation and the consultation processes, it’s clear that a balanced view has never been sought and there’s grave concern that this Committee is too Edinburgh based and doesn’t understand the damage this legislation will cause beyond Edinburgh. In the creation of this legislation, the Scottish Government consulted with 592 affected residents, 63 community organisations and just 5 professional self-catering operators. No wonder they came to such biased conclusions. 

The concerns of those against the proposals are that businesses will close. In a survey conducted by our industry body, the ASSC in 2020 in which over 1,100 people took part, 49% said they’d close their self-catering unit if this legislation passes unchanged. 49%. Just that figure should, I hope, make you sit up and realise the damage this legislation will cause. Because that level of closure will have an incredible impact on the tourism industry across the whole of Scotland, the cafes and shops, the attractions that all depend on tourists especially in our many rural locations where tourism IS the main industry. The self catering sector generates £723 million for the Scottish economy in a normal year. It’s a significant industry you have the power to destroy or support next week.

There’s widespread concern that, due to the legislation being badly drafted, at the time of the truncated consultation in 2020, you didn’t realise that B&B’s would be affected too, so they didn’t get the chance to state their point of view. When legislation is drafted which is full of unintended consequences, there’s a significant problem. Of course, B&Bs needed to have been able to take part in the consultation too.

There’s significant concern about the lack of the BRIA which should have been available with the consultation and the inadequate nature of the BRIA. You cannot legislate on an industry worth £723m on inadequate data and research on the economic impact of your decisions.

Apart from the New Town Community Council ALL other Community Councils/organisation responders are very much against the proposals. That should make you think.

Highland Council have openly said they can’t resource it. I’m sure they aren’t the only council in that position.

Everyone mentions the extraordinary timing of this legislation with the COVID19 backdrop, when Scotland’s tourism industry is on its knees, rather than supporting us, the desire seems to be to squeeze the last breath out of us. It’s bamboozling. It’s bizarre. It’s extraordinary. Ultimately, it’s insane.

What truly depresses me about this legislation is just how negative it is. Scotland had the opportunity to create something world beating here, something which looked to the future with a positive outlook and solutions for how to get this right. But instead you’ve created legislation which will beat this industry out of existence.

There’s no acknowledgement of how important this industry is to our economy, no acknowledgement of the professionals up and down the land who have been doing a brilliant job for decades. Why it feels so offensive as a professional operator or agent, like me, is that there’s an assumption we’re all doing a terrible job, flouting laws, showing no concern for neighbours  and therefore needing to be licensed and legislated (licensing that will be far more rigorous than it is for anyone opening a pub) That may be true of a very small number of profit hunting amateurs in Edinburgh, but NOT of our industry as a whole. You’ve created a wrecking ball to crack a peanut.

People across Northumberland and the Lake District will be unexpected beneficiaries when tourists who would have chosen Scotland, chose there instead after our own tourism industry is wrecked by our own Government. It would be laughable if it weren’t so serious.  

Also depressing me and many others is the fact that self catering accommodation is a SOLUTION to SUSTAINABLE tourism, but you’ve completely ignored that too. With the planet in crisis, we should be encouraged to holiday in our own country. Not just in COVID times, but always. Self catering homes are a perfect SOLUTION for this. Quite often in our rural locations they’re the main choice of where to stay. And they’re an opportunity to stay in the heart of nature. They’re affordable to families too. Scotland is one of the most beautiful countries in the world and so we’re so lucky across the UK to be able to holiday here and not damage the planet in the process. Why for the sake of the earth would you be interested in passing legislation that will damage our ability to holiday in our home country?  

Finally, why have the excellent, sensible, workable solutions put forward by our industry body, the ASSC been ignored? You can read their submission, summarising three and a half years of hard work here

https://www.assc.co.uk/wp-content/uploads/2021/01/ASSC-Submission-to-Scottish-Parliament-Local-Government-and-Communities-Committee.pdf

Please do not pass this legislation. At the very least, please delay it. Let’s create something world leading, not industry beating. It is so important for Scotland that you get this right, not wrong.

Thank you.

Louise

With thanks to Louise Dickins, owner of Dickins, and ASSC Member

Dickins lets special and unique self catering homes from home in Edinburgh from three nights up to six months.\

Read the ASSC’s submission to the Local Government and Communities Committee.