B&B Blog

David Weston of the Bed & Breakfast Association 'fights the corner' for this £3.6 billion 'cottage industry'

Thursday, 7 January 2021

B&Bs in Scotland: the new 'Short-Term Lets' licensing law may affect YOU: act before 22nd January

As we told members at the end of last year, we are very concerned at the way the Scottish Government is choosing to regulate "short-term lets" (STLs).

 The original intention was to tackle the very real problems which have arisen (especially in cities like Edinburgh) as a result of the explosive growth of unregulated accommodation on platforms like Airbnb. These represent a danger to consumers, a nuisance to neighbouring residents  - and of course, very unfair competition to B&Bs who comply with existing rules and are checked and inspected for fire safety etc.

As our members will know, one of our campaigns since 2012 has been to level the playing-field between bona fide B&Bs and platforms like Airbnb. We urged the Scottish Government (including in our original submission to their consultation process back in July 2019) to look at the option of a low-cost, light touch accommodation registration scheme.
 
Our fear was that the Scottish Government's preferred option of a licensing scheme would be unwieldy, expensive and onerous, and would be likely to have unintended consequences.

Despite our clear submissions in 2019, the Scottish Government then decided to proceed with a licensing scheme for STLs, and asked for further comments on this last October.  In our submission then, we answered as follows:

We made a fuller submission at an earlier stage of this process (July 2019), and are NOT generally in favour of the approach now chosen; hence this brief submission confines itself to remaining points within the remit of the current consultation.

As we understand it, UCO "Class 7" (Hotels and hostels) are excluded from the definition of a "short term let" under 4.7. These are premises used "as a hotel, boarding house, guest house, or hostel".

We would like to clarify that this means that "traditional" B&Bs and guesthouses are NOT subject to the proposed legislation on short-term lets.

Should a B&B or guesthouse happen NOT currently to be classed under "Class 7", we would like it clarified that the application for change of use class to Class 7 will be expedited by the appropriate planning authority, to avoid businesses not intended to be subject to these regulations being drawn in.


3 Please identify any issues with the proposed licensing order as set out in chapter 6, and how to resolve them.

We have never been in favour of a licensing scheme, preferring a low-cost registration scheme. However, if a licensing scheme has been decided on, we strongly advise that thought be given to making it affordable to micro-businesses. The regulations seem to provide for the relevant department to decide how much to spend, then divide that figure by the number of properties and charge accordingly.

To us, that is a recipe for over-spend in cost and consequently for very small enterprises to be hit with punitive charges as the price of doing any business at all. That would be unfair, disproportionate and damaging to Scotland's economy and to tourism.

The main purpose of this regime (we believe) should be to bring accommodation on "peer to peer platforms" - which come within the definition of "short term lets" - into a comparable safety compliance, inspection and enforcement regime as that currently applied to our members (B&Bs & guesthouses). The licensing scheme should NOT be aimed at being financially punitive.

The license fee for the smallest properties/businesses should be set bearing this in mind, and after consultation with industry representatives - and kept under review. 


We understood that the Scottish Government's original intention had been to target the new STL rules at the risky short-term lets causing the problems - ie those on the platforms which are unchecked and unregulated. But the legislation they have now drawn up will catch small B&Bs too: ie those of "Class 9" (houses) under the Use Class Order (UCO). 

UCO 9 allows a householder in Scotland to offer bed and breakfast without planning permission "where no more than two bedrooms are used for this purpose or, in the case of premises having less than four bedrooms, only one bedroom is used for that purpose". It looks as if all small B&Bs in this category will have to apply for the new licence. We are very disappointed that the Government has taken this course, and will be pressing for changes. 

Our colleagues at the Association of Scottish Self-Caterers (ASSC) - who also represent thousands of existing home-based micro-businesses in Scotland - have similar views to us on the principles of this issue and the mistaken (in our view) path the Scottish Government has embarked upon.
 
The ASSC has written a very useful summary of the implications for B&Bs of the Scottish Governemnt's STL regulations, which we urge you to read - it is here:
 

Do particularly look at the licensing scheme's onerous demands such as around EPC certificates - this will be a disproportionate and unnecessary burden on small B&Bs in older or historic buildings.  The ASSC outlines these requirements on the page linked above.
 
 
A catastrophic "Double Whammy": 
 
All the B&B owners in Scotland we have spoken to are understandably very concerned that the poorly-drafted “Short-Term Lets” licensing legislation would be hugely onerous to microbusinesses across Scotland, and would be a catastrophic “double whammy” after these very same small family businesses have been so disproportionately hit by Covid-19.

Our (UK-wide) member survey in December found that on average, B&Bs had their sales turnover in 2020 down 60% on 2019; the ONS showed UK GDP* was down 8.6% in 2020 - so that means that B&Bs and guesthouses have been hit seven times harder than the economy as a whole.   Hence the need for very targeted support measures to aid recovery, NOT for onerous and costly new burdens on micro-businesses that are already complying with health and safety regulations.
* 3rd quarter 2019 - 3rd quarter 2020, ONS
 
The Bed & Breakfast Association told the Scottish Government from the beginning that a simple, low or no-cost, light-touch registration scheme for tourism accommodation would enable consumers to be protected and level the playing-field between B&Bs and the currently unregulated accommodation on platforms like Airbnb.  The core problem this licensing scheme was aimed at solving was a very localised one, largely in Edinburgh - but the scheme as drafted will damage small businesses right across Scotland and damage Scottish tourism.

Some comments from our members show the strength of feeling:

“There is no way on gods earth we could continue to trade if this comes into force. Plus in these uncertain times, where we have had no bookings for the past 3 months, despite still being open, is just ludicrous.
If this does go ahead we ( and I’m sure many others) we will have to stop trading, we would be running at a loss.”
A B&B owner in Orkney

“This will be damaging to our business and others alike…  Having been closed for most of the past 12 months and only having one grant from the Government to cover our costs, this will truly put another strain on our already struggling business.”
A B&B owner in Moffat

 
We hope the current proposals are set aside for a fuller consultation and proper impact assessment before being reviewed and reconsidered.    

 
What you can do:
 
1) Please contact your local MSP highlighting the problems with the regulations, quoting as much as you want from the information provided by us and/or the ASSC, noting that one of the unintended consequences of this rushed legislation is that it will affect B&Bs. 
 
You can find your MSP using the postcode checker tool on the Scottish Parliament website: https://beta.parliament.scot/msps/current-and-previous-msps     
 
 
 
2) Please also email your views to LocalGovernmentandCommunities@parliament.scot  by Friday 22 January.
 
As detailed on the ASSC summary page for B&B owners (see link  above), the Committee are asking for responses in the form of answers to three specific questions, which are:

1. Do the proposed changes strike the correct balance between protecting the long-term sustainability of local communities and promoting tourism and strong local economies?
 
2. Has the Scottish Government’s defined short terms lets in a clear and correct way in the legislation?
 
3. Will local authorities have adequate resources, powers and expertise to make a success of their new powers and duties?

 

 
Again, when emailing your responses to the Committee please copy ininfo@scottishbandbassociation.org and  communications@assc.co.uk
 
 
****************

If you own a B&B or Guesthouse in Scotland and are not yet a member of the B&B Association (which includes membership of the Scottish B&B Association), there are many reasons to join us - including helping us lobby against onerous and expensive STL rules affecting your business.  You can join us for just over £1 a week (£55 a year) - click here for details.

Tuesday, 12 May 2020

The £617 million Grant Fund for Council Tax paying B&Bs

This is an update on where things are with the £617m fund - as we know many are desperate for information:


As the UK trade association for B&B and guest house owners, the B&B Association is here to "fight the corner" of B&Bs - so when the original Government help schemes for Covid-19 came out back in March, we immediately started lobbying Government to fill in the "gaps" in the first schemes.

An early one was the self-employed - which many B&B owners are.  The Government later launched its Self-Employed Income Support Scheme (SEISS), to provide support to the self-employed, based on their last three years' average earnings.

But another big gap was B&Bs paying Council Tax rather than Business Rates. The original grant scheme for small hospitality businesses was based on business rateable value, so was no help to those who only pay Council Tax - as 51% of our members do. 

So, from 23rd March we spent six weeks lobbying Government for grants to be extended to Council Tax paying B&Bs.  Eventually on Saturday 2nd May, the Government announced a new "top up" grant fund of £617 million, which was prioritised for (amongst others) "bed and breakfasts that pay council tax rather than business rates".

So far, so good - but a leaked internal Government document about the fund seemed to imply that any business that was "eligible" for the previous grant schemes or SEISS might not be eligible for the new fund. 

This would not be good news for those who might be eligible for SEISS but not get much at all from it because they did not make much taxable profit (SEISS would pay 80% of the total of three average months' taxable self-employed income - averaged across the whole year). 

Another battle to fight!  We explained these issues to Government, and strongly pressed for "eligibility" for SEISS not to rule out applicants for the new fund. It would be better for each business to be able to choose which to apply for, depending on their circumstances.

It was encouraging when Oxford City Council put out a paper about the fund which had changed the condition to exclude those "already in receipt of.. SEISS". 

But we still (as of today, 12 May) do not know what mandatory Terms & Conditions (T&Cs) the Government (BEIS, under Alok Sharma) is imposing on local authorities as regards the fund. As we tweeted on 7 May, we were told that BEIS was due to issue directions to local authorities this week (w/c 11 May).

Local authorities are being given their share of the £617 million, and will distribute the fund to businesses and have "discretion" over it.

So for each B&B, it is the T&Cs set out by their own local authority which matters.  We advise all B&Bs paying Council Tax to check your local authority's website now and daily over the next few days, as applications could open any time now for this fund.  Indeed some local authorities might already have opened them.  You would be well advised to apply as soon as possible, as funds are limited.  Local authorities will not be contacting everyone who may be eligible (several have asked us for lists of every B&B in their area, as they don't have lists themselves!).

The Government have told us that their key aim in designing their various support schemes has been that for any individual business affected by Covid-19, one Government support scheme will help them. This might be the Job Retention Scheme (for employers, today extended until October), SEISS (for the self-employed), the Coronavirus Business Interruption Loan Scheme (CBILS), the Small Business Grant Fund or Retail, Hospitality & Leisure Grant Fund (both for Business Rate paying businesses), or the £617m grant fund we've described above (for Council Tax paying B&Bs missing out on other help), or the "Bounce Back Loans": fast-track loans, "paid in days", 100% guaranteed by Government with nothing to pay for 12 months (£8.4 billion of these 'Bounce Back Loans' have already been paid out to nearly 270,000 small businesses since the scheme launched last week).

(Other help includes HMRC giving extra time to pay VAT and other tax.)

Unfortunately in reality there are many anomalies and unfairnesses in the way different types of business have been able to access financial assistance, but the Government's stated objective is that at least one of the above help schemes should help your business survive through the lockdown so it can open again in the Summer, when "Step 3" of their "Recovery Strategy" is reached (on 4th July at the earliest).

Good luck in your applications to your local authorities - do let us know how they go.

Our subscribing members will be kept fully up to date as always - keep an eye on your email inbox.   And if you're not already a member, your joining options are here. You can join us for as little as £19 for three months from the start of the month after you sign up.



UPDATE 13 May:
The official Government guidance to local authorities from BEIS has now been published for the "Local Authority Discretionary Grants Fund" (LADGF).
The key paragraph on eligibility is:

29.This grant funding is for businesses that are not eligible for other support schemes. Businesses which have received cash grants from any central government COVID-related scheme are ineligible for funding from the Discretionary Grants Fund. 

Such grant schemes include but are not limited to:
  • Self Employment Income Support Scheme
  • Small Business Grant Fund
  • Retail, Hospitality and Leisure Grant
After such a long wait for this "clarification", the above is infuriating, as the wording is sloppy & contradictory. The first sentence of the key para talks about eligibility for other help, but the next sentence says businesses who “have received” cash from other schemes are ineligible. How local authorities interpret that is key.

For what it's worth, our interpretation is that the first sentence is a preamble and not legalistically worded - just an opening statement saying that the LADGF is (in principle) for businesses who have not yet received Government help. We think the second sentence (which we put in bold above) is the key one. That would imply that if you were eligible for SEISS but knew you wouldn't get much from it, you could choose not to apply for SEISS, and apply for the LADGF from your local authority instead.

That is only our interpretation though, and what matters is how each local authority translates the above central Government guidance into its own T&Cs for the grant.

As we advise above, check your local auhority's website now and daily until details about the LADGF appear - and do let us know what your local authority allows.


Thursday, 7 March 2019

Why ‘highjacking’ your name on search engines should be banned


The relationship between accommodation owners and giant online travel agencies (OTAs) is one of the hottest topics in our industry just now.

The big OTAs undoubtedly offer huge benefits to hotels and B&Bs, helping us to fill our rooms by marketing them globally on user-friendly apps and websites for a known commission rate, payable only when a booking is taken.

However, this great boon has come at a heavy cost – the dominance of especially the two biggest American OTAs who have 80% of that market, and the consequent reduced margins for accommodation owners and loss of cashflow, soaring cancellation rates, and a compromised relationship with their guests.

Profits have taken a big hit for accommodation owners, employers and risk-takers as the online intermediaries grab an ever-larger share of bookings (taking their 15-25% cut on those), and consequently prices have been driven up for consumers, and  the OTAs have been hugely enriched. The big two OTAs are now worth much more than the biggest four global hotel groups combined.

From the small accommodation owners’ perspective, this loss of control and profitability to the intermediaries has not been the result of free and fair competition. It has been at least partly driven by (a) some egregiously misleading marketing, (b) restrictive “rate parity” clauses preventing discounting by owners to their direct bookers, and (c) the dominance by the OTAs of internet search.

Back in July 2017, the B&B Association filed five formal complaints with the UK competition regulator (CMA) covering those three key areas.  Three of our complaints – on fake “discounts”, misleading availability statements and manipulated search rankings – were acted on by the CMA on 6th February this year, when they banned a raft of“misleading” practices by OTAs.

Our first complaint to the CMA had been about “rate parity” clauses, which we still want banned – and I wrote about that issue in Travel Weekly recently (“Why OTA ‘rate parity’ clauses should bebanned”, Feb 13th).

That leaves our fifth complaint to the CMA from 2017 (also still not addressed): against forced (non-optional contract term) bidding by OTAs on hotel and B&B names with search engines.

This practice enables the OTAs to colonise the top of search listings, even for searches of a B&B’s or hotel’s own brand/name, without the owner’s express permission. It is typically bundled with all the other T&Cs, so non-negotiable.

One of our members, Frank McCready, referred to this as “brandjacking”. He says: “The considerable investment I have made in a website that enables online realtime availability and booking is totally wasted. I am now invisible in web searches- lucky to appear on page ten!”  His requests to the OTA to stop bidding on his name were refused, and he was told by Google that only a spend of over £900 per month on pay-per-click would counter the OTA taking top place on Google searches for his B&B’s own name.


We agree that a hotel or B&B should be allowed to say to an OTA “yes, we’re happy to deal with you, happy to give you our availability, happy to pay you commission on bookings you bring us, BUT we don’t want you to undermine our own direct marketing by bidding on our own name with search engines”. That would make competition freer and fairer.

The way to achieve that is for the CMA to ban the OTAs from forcing their name-bidding terms on an accommodation provider. That must not be a non-negotiable item bundled into the OTA’s T&Cs on a “take it or leave it” basis as at present; it must be subject to separate express agreement.

We see this ‘ask’ as a modest and reasonable way of redressing the grotesque imbalance of power between global OTAs and tiny family businesses, and making competition a little fairer. So join me in urging the CMA to act.

CLICK here to read and sign Frank McReady's Petition

Sunday, 10 February 2019

No "free ride": why OTA "rate parity" clauses must be banned

A landlord tells the authorities that he has just spent many millions building a five-storey, gold-plated store on Bond Street. But he is worried that his investment might not pay off - unless his merchandise suppliers can be prevented by law from undercutting his chosen markup. Otherwise, he says, they could "free ride" at his expense, by gaining promotion in his Bond Street windows, after which shoppers could buy direct from the producer without the Mayfair mark-up.

So the landlord (an American billionaire) asks the British competition authorities to allow him to legally prevent his suppliers from undercutting him.  Shoppers must always pay his Mayfair markup, even if they buy direct from the maker, not at the Bond Street shop.

Farfetched?  Ridiculous?  Not in the world of "Online Travel Agencies" (OTAs).  Because these global giants (including Booking.com, worth $88 billion, and Expedia, worth $22 billion) have used this "free riding" argument to convince the UK competition regulator (CMA) that their restrictive "rate parity" clauses on B&Bs and hotels are justified, and therefore legal.

The "rate parity" clauses (in competition law jargon, "narrow MFNs") are put by OTAs into their contracts with B&Bs and hotels, to prevent the accommodation owners from discounting their own prices to their own customers on their own websites. The OTAs demand a certain commission level (typically between 15% and 25%), and insist that the B&B or hotel must charge the full commission-inclusive price to customers on the B&B's or hotel's own website too.  Even when no commission is payable - for example, when a guest is booking a B&B direct from the B&B's own website.

The CMA recognises that such "rate parity" clauses are a restrictive practice, alien to most of today's commercial world - "retail price maintenance" was outlawed in Britain in 1964 as against the public interest.

Yet so far, the CMA has accepted the OTAs' "free riding" argument justifying their restrictive practice.

OTAs have said that the millions they spend on websites, apps, brands and advertising might not be viable if the merchandise producers (ie accommodation owners) were allowed to undercut the gross prices that include their hefty mark-ups to pay for that gold-plated virtual storefront.  That would, they say, be "free riding". They insist they must be allowed to keep prices high online.

Common sense would suggest that our fictional landlord with his Bond Street store would be sent packing by the authorities. Their answer would be simple: NO. No, you can't prevent the merchandise producers from selling elsewhere for less. No, you can't drive up the prices shoppers pay by forcing manufacturers to price in your Mayfair markup. No, you can't expect the legal system to underwrite what you have chosen to spend on your shop windows. If you chose to build that shop, that was your free choice and whether it is viable depends on the marketplace. If it isn't, you go bust. That is free competition in a free market.

We raised five formal complaints with the CMA back in July 2017. We are absolutely delighted that last week, they took action to ban a raft of the misleading and abusive practices we highlighted.

One of those complaints, though, its still outstanding: we asked the CMA to ban "rate parity" clauses here in the UK, as they have been in France, Italy, Austria and Germany.

We now repeat our call to the CMA to finally reject the OTAs' blatantly self-serving "free riding" argument, and ban "rate parity" clauses by OTAs.

What have giant global corporations to fear from tiny B&Bs freely setting their own prices to their own customers? Why do the online giants need to restrict small family businesses, and keep prices high for consumers? Let's have free and fair competition.

Over 18 months on, the CMA should act now and give the dominant global OTAs the answer that Bond Street landlord would have got: NO.



Sunday, 13 January 2019

Did you know that "recommending" a supplier can now be illegal?

Be careful now when "recommending" a specific supplier to your guests, or when "adding value" to your stays (by including another element) - as both may now be illegal in certain circumstances, unless you have protected your guests' payments (for example, by taking out insolvency protection or arranging a financial "bond").

In July 2018 the Package Travel regulations (PTRs) were completely revised. Originally dating from 1992 and designed to protect holidaymakers from the risk of their tour operator going bust, the PTRs are now much wider and do affect B&Bs in certain circumstances. We and many industry bodies (especially the Tourism Alliance, of which we are members) tried vigorously over the last couple of years to persuade the Government to modify the UK regulations from the EU directive they are based on - but to no avail. So we are left with a ridiculously disproportionate set of laws that will be "honoured more in the breach than the observance". We regret that these laws now bind us - but as your trade association, it is our duty to inform you that this is now the law of the UK.

Penalties for "adding value":
If you "add value", by combining another element with a stay at your B&B - for example, by adding a local green fee to make a golfing break - that may create a "package", which means that you (as the package "organiser") must have insolvency insurance, a client "escrow" account or be "bonded" like a tour operator. Selling a package without such protection can make an organiser liable to criminal prosecution [sic]. 


The Government has been telling our industry that a priority should be to "add value" to innovate our product and increase our sector's productivity - yet the PTRs actively discourage adding value.

Penalties for "recommending":
If you "recommend" a particular supplier - for example, a local pub or restaurant - the PTRs may make you 100% liable for that supplier's performance, as if you were providing it yourself.

Detailed guidance is available for our members:
If you are a member of the Association, you will find new and detailed guidance documents on our member pages, which explain the full details of the PTRs and how they may affect your business.


If you are not yet a member, simply join us, then login to our member pages using your member password to view the full guidance documents.

Monday, 3 September 2018

Going Above & Beyond – What Makes A Great B&B


What makes a B&B outstanding? 

Carly Menken from Direct Line for Business shares her advice on how to go above and beyond: 


Get to know your guests
Want to delight your customers and be the perfect host? Be prepared from the outset. Send your guests a quick email after they’ve booked to ask if they have any food preferences, require a parking space, or if there’s anything else they’d like on arrival.
On arrival day, first impressions count, so make sure your guests feel welcome and at ease straight away. Give them a quick tour if they’ve not stayed with you before and offer them a welcome drink. You can really make a lasting impression for your regular guests by throwing in something special for them, like their favourite snack or a bottle of wine in their room.
When it comes to check-out, don’t miss the opportunity to find out how you could improve your guests’ experience. Ask them to fill out a quick feedback form – they’re more likely to give you their honest opinion if these are anonymous. And feedback doesn’t have to be one way – let your guests know what great customers they’ve been, and remember to thank them for staying with you.

Find your unique selling point (USP)
To really impress your guests, you need to give them something they can’t get elsewhere. Research your competitors and get to know what they offer, so you can do things differently or better. For example, if a rival B&B owner leaves newspapers out for guests during breakfast, go one step further.  Ask your guests what newspaper they'd like before they arrive.
If there’s something that makes your B&B different, make the most of it. Perhaps you have a unique location or an interesting history? Promote your uniqueness to stand out from the competition.

Stock up on the essentials
When you’re running a B&B, you’ll quickly realise that guests forget things. So be prepared and stock up on basics like toothpaste, toiletries, new toothbrushes and cotton buds. Choose luxury items to really treat your guests, and make sure you have extras of everything, like towels, so they don’t feel awkward about asking for more.
It’s also nice to leave a guest room basket or pack, with maps, local taxi numbers and restaurant recommendations. Other welcome tray ideas include tea making facilities, snacks and bottled water.

Manage expectations
The easiest way to make sure you don’t disappoint guests is to be honest and upfront about your accommodation. If the rooms are a bit small don’t exaggerate their size – some guests will be perfectly happy with a cosy bedroom if the breakfast is great. Make sure you plan for worst-case scenarios; make a list of things that can go wrong (or have before) and come up with an action plan for each.
Guest expectations managed? Now you can exceed them. Always offer a bit more than your website or listing says you do. It’ll be a lovely surprise for your guests (and something your competitors won’t be able to nab!). A small gift on departure, for example, goes a long way.

Don’t forget the basics
It’s easy to get carried away with ways to wow your guests, but don’t forget about the B&B staples.
You can be in the most rural location but guests will still expect good Wi-Fi. So, do your best to find an internet provider that can make this happen.
At breakfast, try to provide a wide selection of foods – or, even better, ask your guests in advance what they’d like to eat. Try to be flexible about check-in and check-out times – a rigid early check-out can put a slight dampener on an otherwise great stay.
When it comes to the rooms, the two things that can really affect your guests’ comfort are temperature and noise, so do what you can to get these right. It goes without saying that rooms should always be spotless and decorated tastefully.

Have fun!
To be a great host, let your guests get to know the real you.
Remember why you started hosting in the first place. Chances are you enjoy meeting and interacting with new people, so set aside time to do this – whether that’s stopping to say hello over breakfast or inviting your guests for an early evening drink before they go out for dinner.
If you’re stressed, others will notice. Find the balance between enjoying yourself and providing a great service – your guests will thank you for it.

Being a good bed and breakfast host
In summary, it’s often the simple things, which don’t take much time or money, that take a B&B from being good to great. Being smart about what you offer your guests and how you communicate with them will have a big impact on their stay.

Wednesday, 18 July 2018

MPs call for "level playing field", and more responsibility from "Sharing Economy" platforms


 We welcome the publication today (18 July 2018) of a report on the so-called “Sharing Economy” by the All-Party Parliamentary Group (APPG) on Tourism, Chaired by Gordon Marsden MP (left) . The Report calls for “a level playing-field for all tourism businesses”, and calls for Airbnb-type properties and similar small B&Bs to be treated the same way. 

It also calls for platforms to "ensure that hosts have, as a minimum, undertaken a fire safety assessment, a health and safety assessment and, where relevant, have Gas Safe certification. Accommodation providers should not be allowed to register properties without proof of these assessments". 

These recommendations echo what the Bed & Breakfast Association has been calling for since 2012, and our own evidence to the APPG given in February.

The APPG notes the scale of the issue, saying “PWC estimate that sharing economy businesses in the accommodation sector generated £3bn in sales during 2015 and that this level of revenue could rise to nearly £30bn by 2025 with around 50% of all rentals undertaken in the UK being conducted by peer-to-peer networks”. (Airbnb alone already has well over 168,000 listings in the UK, compared to 25,000 or so B&Bs.)

A key recommendation in the APPG Report is for the Government to consult on a “low-cost statutory registration scheme for tourism accommodation businesses”. In the past, the B&B Association has opposed registration schemes because of the added red tape and cost, but we are now prepared to consult constructively on the principle, because if a simple and low cost scheme could be devised (and the devil is, as ever, in the detail), the burden of registration could well be worth it for the overall benefits it would bring to our members in leveling the playing-field and reducing unfair and illegal competition.  It would also of course help to protect the public, by bringing the safety checks on Airbnb-type premises up to closer to the level of those on our members.

(Every business serving breakfasts to paying guests already has to comply with a national registration scheme in any case, as they have a duty to register as a “food business”.)

The Report emphasizes the importance of “Delivering a level playing field for all tourism businesses”, and says “considerable concerns have been expressed that hosts providing accommodation via sharing economy platforms do not comply with health and safety regulations”

The Report says: “All visitors are entitled to a minimum level of safety, regardless of the type of accommodation they use and method by which it is booked. It is responsibility of all agents, regardless of whether they are sharing economy platforms or traditional booking agencies, to ensure that the products they supply meet these minimum standards. We have found that the systems in place for informing hosts of their legal responsibilities are inadequate, to the extent that some even allow hosts to register properties if they confirm that they have no fire safety equipment installed.”

“The sharing economy has argued that regulatory requirements should be proportionately less for businesses listed on their platforms. The APPG for Tourism agrees with the principle of proportionality, but supports the Government’s view that existing legislation, especially that related to fire safety, is already based on proportionality. We also believe that there is no valid basis to contend that B&B accommodation provided via a sharing platform warrants different regulatory treatment to the same B&B accommodation not listed on sharing economy websites. Further, there is significant evidence to suggest that a large and growing number “professional” operators use sharing platforms to list properties, thereby making any attempt at categorisation a moot point.

“While finding that the legislation that applies to accommodation businesses is fit for purpose, we have identified significant issues regarding enforcement. Most sharing economy platforms do not reveal the address of the property until a booking is made. This, combined with sharing economy companies refusing to provide property details on the basis of DATA Protection and significant cuts to councils expenditure on enforcement, means that few, if any, sharing economy properties are ever inspected.

“The APPG for Tourism recommends that the Culture Secretary launch a consultation on using his powers under the Development of Tourism Act 1969 to establish a low-cost statutory registration scheme for tourism accommodation businesses. Such a scheme could be devolved to councils and would help resolve the main issues identified by this Inquiry. Namely, it would:
  • Help ensure that all businesses complied with regulations
  • Provide enforcement officers with a database of tourism accommodation properties so that they could target their resources to those properties they deem to be the highest risk
  • Provide councils with greater ability to manage tourism in their area
  • Provide HMRC with a means by which to ensure that all businesses pay the appropriate level of taxation.
“The APPG also recommends that the Government provide Local Authorities with powers to set rules regarding the use of residential properties for Tourism Accommodation so that local solutions can be developed that balance the benefits generated by sharing economy accommodation with needs of local residents. These powers include:
  • The ability to set the maximum number of days per annum that a property can be used for tourism accommodation
  • The ability to require the owner of the property to be present if a property is used for tourism accommodation”
Other recommendations by the APPG:
  • That the Government urgently assess whether local enforcement agencies have adequate resources to carry out safety inspections of tourism accommodation businesses. This has significant implications for large towns and cities were the provision of sharing economy accommodation in high rises and houses in multiple occupation is becoming more prevalent.
  • That sharing economy companies take greater responsibility for informing hosts using their platforms of their statutory obligations, especially in relation to health and safety and fire safety.
  • That sharing economy accreditation schemes such as those developed between Airbnb and Quality in Tourism, are rolled-out across all properties on all sharing economy platforms.
  • That sharing economy companies develop and implement procedures that ensure that hosts have, as a minimum, undertaken a fire safety assessment, a health and safety assessment and, where relevant, have Gas Safe certification. Accommodation providers should not be allowed to register properties without proof of these assessments.
  • That Sharing Economy companies explain to hosts before they register that having paid guests staying in their property will affect their home and contents insurance, mortgage, leasehold agreement and that they should purchase public liability insurance.
  • That the sharing economy industry work with the insurance sector to help develop domestic Home and Contents Insurance products that are not invalidated if owners have paying guests for a set number of days each year.
  • That the public liability insurance provided by sharing economy companies is of the same standard, with the same levels of cover, as commercial products.
  • That far more attention needs to be given, and more research undertaken, as to the experiences of, and impact on, those living in close proximity, either as physical neighbours, or in the neighbourhoods of, properties being used regularly by sharing economy businesses.”

The Bed & Breakfast Association welcomes the report, and calls on the Government to use its powers to take action on areas highlighted in the report, including especially:
  • Requiring peer-to-peer platforms to fully, properly and explicitly inform their “hosts” of their legal responsibilities;
  • Requiring peer-to-peer platforms to refuse to list properties that do not fully comply with the law;
  • Requiring peer-to-peer platforms to identify premises owners to statutory safety regulators (eg Fire & Rescue Authorities) on request (without demanding a Court Order), so the regulators can perform their duty to protect the public.
We also stand ready to play a constructive and positive role in consultation with the Government about a low-cost statutory registration scheme for tourism businesses.

For our part, we are also open to following the Report’s recommendation to “find constructive ways of working together” with sharing economy businesses “to generate new opportunities and enhance customer experiences”.  We are happy to co-operate, innovate and find ways of developing the UK’s hospitality offer (currently, as the APPG notes, worth 7.1% of  UK GDP and providing 9.6% of UK jobs) – but always in ways underpinned by trust and responsibility.