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.