Sharing Economy and Tourism Levy updates

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Sharing economy. In conversation with colleagues I have discovered that in my recent update on Airbnb’s announcement of a voluntary consultation on registration, I may not have been sufficiently explicit about why some in the industry may be concerned by this apparently helpful move?

At around the same time as the consultation announcements Airbnb also declared their intention to go public during 2020.  It is one of the few new technology companies that actually makes a profit, although it is not entirely clear just how much.  The prospect of a robust and effective registration scheme in the some or all parts of the UK would almost certainly have some impact on the number of  host and properties offered and, in all likelihood, in turn on the future profitability of all sharing platform business models and therefore, potentially, on the company’s future valuation and offer price.

Consequently, some commentators are questioning both the motive and timing of voluntary consultation, especially given the parallel calls for action from several other quarters and the very real prospect of  some form of action on registration in Scotland, potentially quite soon.  Their questions are whether the consultation is a genuine attempt to help move the issue forward, as I think we would all hope and naturally assume, or more cynically,  whether it might be a move to try and delay, remove or minimise the impact of the possible implementation of a more robust and truly effective registration scheme at least until post 2020? None of us would of course wish to believe the latter.  Hopefully this may help explain why it is though important to try and ensure that the widest selection of views possible are aired during the Airbnb roadshow, as it makes it way around the UK and that other ongoing activities are vigorously pursued regardless of the Airbnb’s helpful intervention.

Airbnb have also now submitted their response to the Scottish Government’s consultation.  This makes it very clear what Airbnb already think is fair and reasonable and why they support a very simple. no cost, not checks registration that excludes all hosted venues and whole properties let for less than 28 nights. In their view simple registration should only be applied to whole property actually let for between 29 to 139 nights, with whole properties let for 140 nights and above being registration and subject to planning regulation and business rates.

They make some very persuasive arguments but leave questions unanswered around how the simple registration of some hosts, in some circumstances but not all, will address all the genuine concerns.  Particularly those around safety and legality and what, if any greater responsibility and liability, they are prepared to take on for the accidental or deliberate omissions of some of their hosts. Something that will seldom be addressed by a system of self-declaration, or picked up subsequently by guest reviews alone.  These are largely things that guests can’t conceivable check and most, not unreasonably, already assume the platforms and responsible authorities will have dealt with on their behalf before ever promoting or allowing the product to be promoted.

See the Airbnb response at:  https://press.airbnb.com/wp-content/uploads/sites/4/2019/09/Airbnb-Submission-Scottish-Government-Short-Term-Lets-Consultation.pdf

Tourism Levy. The Scottish Government is now also consulting on the “Principle of a Local Discretionary Transient Visitor Levy or Tourism Tax” (closing 2 Dec 19).  It is an interesting document that airs important issues and contains useful background data.  The outcome of the consultation may not impact directly on destinations outside Scotland but will inevitably influence thinking around the merits or demerits of  levies already being discussed elsewhere in the UK.

Of note, at least one lobbying group is already recommending the exclusion of Scottish residents in order to support the domestic industry.  Notwithstanding the added administrative complexity that would bring, it is an interesting new angle in this already potentially contentious debate.  My immediate reaction is that in Scotland it could reduce number of destinations with sufficient overseas and other UK resident visitors to warrant implementing the discretionary scheme to perhaps one or two at most. Edinburgh and it surrounding area, for example, accounting for c 50% of all overseas visit to Scotland, leaving not a lot for everyone else, once spread amongst them.  In my view, if the principle were accepted in Scotland and then replicated in the thought process for England and Wales, it would effectively limit the utility of any potential levy to just a couple of major Cities and possibly the odd other smaller international honey pot destination.  Some may think that that is a good thing but it does beg the question what avenues are then left available to everywhere else that desperately needs some form of sustainable resource to help maintain and build on the success of their urban or rural destination?

Find the consultation under the “Consultations” main menu tab of Britishdestinations.net or go direct to the page at:

britishdestinations.net/consultation-responses/open-consultations/scottish-government-consultation-on-the-principles-of-a-local-discretionary-transient-visitor-levy-or-tourist-tax-closing-2-dec-19/

 

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