3. Tourism and Accommodation and The Collaborative Economy
3.1. Bringing the benefits to more existing Scottish businesses outside urban areas
3.2 Create and promote more diverse tourist experiences across Scotland
The Panel highlighted the growing economic value of tourism to Scotland. It also noted the importance of self-catering properties in Scotland’s tourist accommodation offer and the expansion of providers through peer to peer platforms.
The Panel recommended:
- The tourism industry should continue current initiatives to improve digital literacy and use of digital marketing.
- There should be more support for peer to peer tourist experiences such as tour guiding and dining, given the increased global demand for these and the opportunity to spread benefits to less visited areas of Scotland.
Scottish Government response
We welcome the recognition by the Panel not only of the crucial contribution that the visitor economy currently makes to Scotland’s growth, but also the opportunities and challenges that the collaborative economy can create, now and in the future, across all of Scotland.
The work of, and evidence gathered by, the Panel has been augmented by complementary research on "The collaborative economy and Scottish tourism"  . Commissioned by Scottish Enterprise, the Scottish Tourism Alliance and the Scottish Government, this report considers the five tourism-related sectors of accommodation, transport, food & meals, tours & activities and on-demand domestic service. It examines to what extent these sectors have already developed in Scotland and the key opportunities such as transport sharing, meal sharing and tailored recommendations and tours from local experts, that the collaborative economy might bring to the Scottish tourism sector, as well as insight and background from the industry to help shape any future regulatory policy.
The Scottish Government already recognises the importance and diversity of “place” across Scotland’s communities. It has committed to promoting inclusive growth and to working with the industry to address the issues of seasonality and support for pressures in some areas that have come from our increasing tourism success. The Rural Tourism Infrastructure Fund for example – which will see £6 million invested over the next two years from 2018 – will support a wide range of improvement projects across rural Scotland: from parking to campsites, these projects provide an opportunity to ensure our most scenic destinations remain as iconic destinations.
The current tourism sector in Scotland is overwhelmingly an industry composed of small and medium enterprises ( SMEs). To maximise inclusive growth in such an SME-dominated sector (who can sometimes find it difficult to scale up), the Scottish Government recognises the need for development such as transport infrastructure, recreational opportunities and the historic environment to ensure tourism spreads throughout each area. There has also been considerable investment in VisitScotland and the other enterprise, culture and heritage bodies to support business and infrastructure. This includes a capital increase for VisitScotland from £600k in 2017-18 to £2.25m in 2018-19 to enable increased investment in their estate and “Scotland Is Now”. A phased approach to development is feasible and can help bring in future investment from public, private, third sector and increasingly from community- or crowd-funding ( see section 5).
There is potential to further increase innovation and the entrepreneurial base within Scotland by using digital platforms. They allow providers to offer a wider range of activities, experiences and accommodation to our visitors, utilising currently under-used assets or rapidly-developing assets which require less capital investment than traditional businesses. This potential for expansion should not displace or eliminate traditional activities such as accommodation providers that do not use peer-to-peer digital platforms or digital opportunities for visitor engagement.
People are at the heart of tourism, both as consumers and as providers. Inter-personal and service skills will continue to be prized within the industry. However, the need for digital skills within the industry will continue to grow, hand in hand with the need for the infrastructure that enables digital capability. This was already confirmed by ‘Strengthening Digital Capabilities’ emerging as one of the four National Strategic Priorities from the 2015 refresh of the Scottish Tourism Alliance “Tourism Strategy 2020”  .
Working with our visitor economy agencies, the Scottish Government continues to support Digital Tourism Scotland - a £1.2 million, three year public and private sector partnership project running until 2019. The partnership aims to improve the digital skills and capabilities of tourism businesses and by the end of June 2018, had already delivered 429 workshops to over 5,200 delegates. There have also been seven industry events with over 1,100 delegates.
82 per cent of businesses that have engaged with the project have said they are now more likely to introduce digital processes.
Scotland’s refreshed Digital Strategy  was published in March 2017 and outlines our plans for ensuring that we put digital at the heart of everything we do. Enhancing Scotland’s connectivity is a key aspect. Although broadband and mobile connectivity is a reserved matter, the Scottish Government has invested significant amounts to ensure our communities can have the connections they need. The £400 million Digital Scotland Superfast Broadband programme has delivered fibre broadband access to 95% of premises across the country. A further £600 million will be invested to deliver the initial phase of our “Reaching 100%” programme by 2021.
Access to mobile services is just as important, particularly in rural areas. Our Scottish 4G Infill Programme is designed to push coverage over and above commercial deployment, addressing long-standing not-spots.
- The Scottish Government will work with its visitor economy agencies to inspire the sector to deliver sustainable growth through digital and data driven novation right across the country. We will help individual enterprises to consider their individual growth opportunities through the changing demands of travellers in the future.
- The Scottish Government and its visitor economy agencies will continue to support the one-door approach in delivering Digital Tourism Scotland, building on the training and support delivered to date and continuing until June 2019.
- We are already working with the tourism industry to develop a single economic narrative that will inform our post-2020 Tourism Strategy. This will address the potential future demand of different kinds of tourist 'experiences' such as new transport options like ride-sharing, food, dining and, accommodation.
- As part of preparatory work for the post-2020 Tourism Strategy, the Scottish Government and its partners will continue to work with the industry to highlight the importance of digital to the continued development of the sector, and the contribution that increased digital uptake could make to Scotland's broader economic goals.
- The Scottish Government will ensure that the data and evidence gained from Digital Tourism Scotland and other businesses in the visitor economy continues to influence the wider digital agenda and reflects tourism as a key economic sector.
3.3. Health and safety in peer to peer accommodation
3.4 Enforcement of health and safety regulation
The Panel highlighted the paramount importance of health and safety in peer to peer accommodation and the responsibilities of hosts, platforms and regulators. The Panel noted that enforcing health and safety regulations within the collaborative economy presents unique challenges, including local authority resources to regulate peer to peer accommodation.
The Panel recommended:
- There should be parity in health and safety regulation for all short term rental accommodation that is not the owner’s primary residence.
- A single code of conduct should be agreed by industry associations for all accommodation providers where the owner is also resident.
- All platforms in Scotland should ask guests about health and safety concerns in properties they have stayed in and platforms should follow these up.
- Local government and regulators should use predictive analytics to target enforcement in areas most at risk.
The Scottish Government welcomes the emphasis that the Panel has placed on ensuring the health and safety of all guests in peer to peer accommodation.
Together with the Scottish Fire and Rescue Service and other key partners, we are working with communities and businesses to ensure they are equipped to prevent fires happening and minimise injury and damage should a fire occur. We also work with partners to ensure regulation is applied consistently, fairly and proportionately.
Fire safety law applies equally to traditional accommodation providers and peer to peer accommodation providers. The Scottish Government has published revised Practical Fire Safety Guidance for Existing Premises with Sleeping Accommodation. This revised guidance is more user-friendly and reflects developments in the growth of peer to peer accommodation.
We welcome the work that has been carried out to date by the Association of Scotland’s Self Caterers and the UK Short Term Accommodation Association in aligning their Codes of Conduct. The codes clarify the responsibilities of short-term let operators, give guests confidence that a property is safe to stay in, and give local authorities a robust tool to tackle any problems.
As highlighted in section 1 we will pilot new approaches to increase trust and transparency in the collaborative economy in Scotland, including the creation of a feedback system for users and platforms and exploring how to gather intelligence in new ways, including from social media. As part of this we will look to encompass how health and safety concerns can also be highlighted through these mechanisms.
- We will continue to work with industry associations, platforms, local authorities, regulators and other stakeholders on implementing the Panel's recommendations in this area, including introducing a mechanism to capture and act on concerns of guests using peer to peer accommodation.
- In setting out an approach to establish a data observatory, the Short Term Lets Delivery Group will identify opportunities to use predictive analytics to target enforcement action.
3.5. Separating peer to peer rental from running a business
3.6 Impact on local communities
The Panel highlighted the challenge in separating occasional providers of accommodation through digital platforms and those who are generating significant income. The Panel noted the balance needed between preserving communities and accommodating tourists, and the challenge of distinguishing between issues with peer to peer accommodation and wider concerns about tourism.
The Panel recommended:
- Collecting an evidence base to assess restrictions on short term residential rentals.
- Exploring a seasonal system in central Edinburgh, where the rules are more permissive during periods of large tourist demand.
- Experimenting with a number of measures to tackle these issues, such as a community code of conduct and increasing community participation in decision making.
Scottish Government response
The Scottish Government agrees that peer to peer accommodation expands the range, choice and flexibility of accommodation for tourists in Scotland. However, as the Panel highlights, a number of issues and challenges have been raised in relation to peer to peer accommodation, and short term lets more broadly. Concerns relate to anti-social behaviour and noise nuisance, and the loss of a sense of community and amenity in areas where a reducing number of properties are occupied by residents.
Scotland’s economy benefits hugely from tourism but it should not be at the expense of local communities. We need to find a way to continue to welcome visitors while ensuring that local residents can live and work in our cities and rural communities. We have an opportunity to learn from the successes and failures of global responses to the growth in short term accommodation. Our approach must balance the importance of ensuring a safe, quality experience for visitors with a proportionate regulatory environment. We recognise that Scotland has a varied geographic mix of urban and rural settings and that the opportunities and challenges in one area may be quite different elsewhere.
There are already measures in place to enable local authorities to deal with issues. The Antisocial Behaviour etc. (Scotland) Act 2004 enables local authorities to deal with antisocial noise and behaviour in short-term lets. In addition, in March 2011, the Scottish Government introduced legislation to help local authorities tackle nuisance behaviour caused by occupants of short-term lets. The Antisocial Behaviour Notices (Houses Used for Holiday Purposes) (Scotland) Order 2011, enables local authorities to serve a notice on a landlord of a property where there has been antisocial behaviour by a person using a property for holiday purposes, or their visitors, while it is being used. Such a notice can be served on the landlord and any known person who acts for the landlord, and means that action can be taken even if the occupant is only resident for a short period of time.
In relation to the planning system, where a householder proposes to change the use of existing residential accommodation, the requirement for planning permission will depend on the circumstances of each individual case. That is why it remains a matter for the relevant Planning Authority, such as the local authority, to determine whether there has been a material change of use and to take account of all the circumstances of each individual case.
However, we recognise that there are the calls in Edinburgh and in some parts of Scotland for new controls over short-term letting of residential properties. This includes concerns about the impact on the availability of housing stock in ownership and for long term let as homes in the private rented sector. We have therefore established a cross Scottish Government Short Term Lets Delivery Group on which will continue to work with the City of Edinburgh Council and other key stakeholders including data specialists. The group will:
- Build the evidence base around short term lets and their impact, positive and negative. It will set out an approach to pilot a data observatory on short term lets.
- Identify the existing powers local authorities have to deal with short term lets, including those around planning and anti-social behaviour. It will identify whether further measures are required.
- Explore ways to pilot solutions in Edinburgh and other local authority areas, including whether a “sandbox approach” can be used to trial any proposed regulatory solutions in Edinburgh.
As the Panel highlighted, there is a need to build the evidence base in this area to seek to quantify the impacts that short term lets are having. There is no single, official or definitive source of data on the supply of short lets in Scotland. This is because of the diverse nature of this sector, some of which is ‘formal’ commercial visitor accommodation but much of which is not formally recorded, particularly those where owners are sharing part of their home, or where owners do not register their property for commercial use. In light of this, the Scottish Government commissioned scoping research into short-term lets in January 2017. Following this, the Panel had the opportunity to hear a wide range of evidence and we have been liaising with the Open Data Institute on their work around how a data observatory might bring together data to further identify both the positive and negative impacts of the sector.
We note the Panel’s recommendations around community engagement. The Scottish Government is committed to supporting communities to do things for themselves, and to make their voices heard in the planning and delivery of services. Better community engagement and participation leads to the delivery of better, more responsive services and better outcomes for communities. Any proposed changes to regulation on short term lets would be subject to consultation.
In relation to business rates the Scottish Government has accepted the recommendation of the Barclay review that to be entered in the valuation roll, and thereby be liable for non-domestic rates rather than council tax, second homes and owners or occupiers of self-catering properties must provide evidence of actual letting for 70 days alongside the existing intention to let for 140 days in the year. The Scottish Government is currently consulting on the recommendations of the Barclay Review and in parallel will continue to engage with local authorities and other interested stakeholders to inform how best to specify this measure and deliver it by 2020.
- We will continue to explore the existing powers that local authorities have to address the challenges around short term lets and determine if further measures are required. We will work closely with the City of Edinburgh Council on this and will consider any proposals that they or other local authorities may have to pilot solutions, as proposed by the Panel. We will consider whether a "sandbox approach" can be used to trial any proposed regulatory solutions in Edinburgh.
- We will work with data specialists, the City of Edinburgh Council and the wider tourism and hospitality industry to build the evidence base around the quantifiable impacts of short term lets and the impact on local longer-term housing stock availability. We will set out an approach to pilot a data observatory in light of this.
- We will seek to ensure that communities are fully engaged in discussions and that their views are heard in this work.