BiGGAR Economics work challenges false narratives surrounding Scotland’s self-catering sector now at risk from heavy-handed regulation.
A new independent analysis from a respected Scottish consultancy reveals the considerable economic impact of Scotland’s short-term let (STL) industry which was also shown to have a negligible effect on housing.
BiGGAR Economics calculated that STLs contribute nearly £1bn gross value added (GVA) to the Scottish economy overall while supporting approximately 30,000 jobs. The Highlands makes up the largest proportion of the total Scottish impact, with the sector generating £200m GVA and supporting nearly 7,000 jobs.
By accommodating visitors, STLs generate economic activity across the Highlands, with the local impacts exceeding residential use, supporting an additional £32,400 GVA per property. Guests staying in STLs also spend more than the average visitor, with knock-on gains for related tourist and hospitality businesses.
Alongside this huge economic boost, the researchers also highlight that self-catering accommodation accounts for less than 1% of the country’s total housing stock, too low a proportion to have a meaningful impact on local housing markets. According to the report, in every local authority area, including Highland, economically inactive empty homes account for a larger proportion of total dwellings than those of secondary lets.
The key headlines include:
The fact that Highland STLs had a greater economic impact in 2023 than Edinburgh may have been influenced by Edinburgh Council’s draconian STL regulations. Indeed, the paper suggests “that a reduction in the supply of short-term lets in Edinburgh has reduced the city’s contribution to the overall benefits they bring to Scotland’s economy.”
This study comes as local authorities like The Highland Council consider their short-term let regulations and as the Scottish Government has published an implementation update report which the industry maintains did not adequately address their longstanding concerns.
BiGGAR’s new analysis is based on the best available evidence on STLs in Scotland. The findings have been shared with Scottish Government Ministers and officials, as well as The Highland Council.
Graeme Blackett, Director of BiGGAR Economics, said:
“This report shows that secondary lets make an important contribution to Scottish tourism and economy overall, supporting almost 30,000 Scottish jobs. Our research also concluded that it was clear that secondary lets are not a driver of the wider Scottish housing market. If short-term let regulations leads to a reduction in the supply of secondary lets, that will have a negative impact on the tourism economy, without delivering any solutions to Scotland’s wider housing challenges.”
Fiona Campbell, CEO of the Association of Scotland’s Self-Caterers, said:
“This is yet more compelling evidence that short-term lets aren’t the main contributor to the housing crisis but are instead turbocharging local economies across Scotland. The impact of STLs in the Highlands is extremely impressive, overtaking that of the capital, providing a £200m windfall and supporting thousands of jobs.
However, all of this is at risk from heavy-handed regulation. Local authorities, including Highland Council, should take heed of the report’s findings when considering their approach to planning policies and control areas to ensure the relatively small number of valuable short-term lets are protected. For policymakers, the message couldn’t be clearer: you can’t solve a housing crisis by producing a crisis in Scottish tourism by decimating local businesses that underpin local economies. Attention must shift to the real causes of the housing crisis.”