Two-thirds of short-term let firms could shut due to licensing, poll suggests

Tourist accommodation businesses in Scotland could close their doors for good due to new licensing regulations, according to a snap poll which found 64% are considering their future.

The survey by the Association of Scotland’s Self-Caterers (ASSC) found small businesses are considering leaving the sector because of the Scottish Government’s new licensing scheme for short-term rental properties which comes into force on October 1.

First Minister Humza Yousaf has been urged to “show leadership” by the body and announce a further pause to the scheme to save businesses.

Of the 2,015 respondents, just 35% of businesses told the ASSC they will not leave the sector over the legislation, while 93% of those who said they are considering leaving cited the licensing scheme as one of the reasons.

Businesses will not be able to continue operating if they have not applied to the scheme for a licence before the October 1 deadline.

It requires operators to display energy performance ratings on listings, obtain adequate public liability insurance and put various fire precautions in place.

But businesses have expressed significant concerns over the costs of obtaining a licence, with individual local authority costs ranging from £250 to £5,869.

The ASSC survey also revealed that 63% of respondents believe the handling of the short-term let scheme has led to greater division in communities, while 79% said they are worried about their future because of the legislation.

Of those who choose to close their business after October 1, only 15% plan to sell their property.

With Mr Yousaf repeatedly ruling out a further extension to the deadline, the ASSC is urging the Scottish Government to heed the warnings of the sector.

Fiona Campbell, chief executive of ASSC, said: “Despite numerous warnings which have regrettably been casually dismissed, the regulations remain unfit for purpose and will wreak untold damage on Scottish tourism and our reputation as a welcoming place to visit and do business.

“Thousands of jobs are at risk in the mainstay of our tourist economy – self-catering and the B&Bs – and that’s before we even consider the impact on related tourism and hospitality industries that rely on their guest spend. This is another policy nightmare the First Minister could do without.

“Rather than unpicking legislation once the damage has been done, Humza Yousaf needs to show leadership right now and support small tourism accommodation providers who are so vital to local economies across Scotland.

“That means an immediate pause to the regulations so Government and business can work together collaboratively – in the spirit of the First Minister’s new deal for business – to get a balanced, fair, and legally sound regulatory framework that works for all.”

It comes after a group of cross-party MSPs, including the Tories, Labour, Liberal Democrats and SNP rebel Fergus Ewing, wrote to the First Minister calling for a rethink on the regulatory scheme.

The Scottish Conservatives are expected to force a vote on the issue after Holyrood returns next week.

Housing minister Paul McLennan said: “We have been engaging with operators for a lengthy period and listened carefully to feedback.

“That is why we granted a one-off six-month extension to the scheme, which means hosts have had 20 months to complete an application. Operators can take confidence that local authorities are working pragmatically to support new licensees through the application process.

“No operator to date has been refused a licence, among the thousands who have already applied.

“Holiday lets can contribute enormously to Scotland’s tourism industry, so the licensing scheme will enhance that by giving assurance to guests over the safety and consistent quality of lets, such as gas certificate compliance and suitable electrical equipment. It also means that good quality, responsible operators will have a level playing field of standards.

“I would repeat calls to everyone within the industry to get behind the scheme and encourage short-term let operators to apply for a licence in good time and before the October 1 deadline.”