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. 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:
As a sector, we urge the Scottish authorities to objectively assess the nuance and complexities of the sector , 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 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.
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 as targeting solely short-term rentals would not contribute meaningfully to overall policy goals.
THE IMPACT OF COVID-19:
According to UNWTO, 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. 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 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, 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.
Carlos Villaro Lassen
Secretary General, EHHA
 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.”
 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.
 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.
 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
 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
 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
 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.”