Developing a tourism accommodation registration scheme in England.

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It is a month to the 12 September deadline for the DCMS call for evidence on the development of a tourism accommodation scheme for England.  Although I have already got the impression most destination managers and many others see the sense in it (a registration scheme), what I am far less certain about is whether there is anything approaching a coconscious about what “it” actually is, what “it” is required and intended to achieve and how effectively different variations of “it” might be at achieving the desired results, for whom and in what circumstances.  That is worrying as it could result in DCMS receiving fewer response than desired or imprecise messaging and them defaulting to either the lowest common denominator or, given other pressures, just dropping an already contentious proposal to fester for another decade or two.

To help you and me develop our responses I thought I should share some initial thought and see to what degree these concur with your own. If they do, then great, if not I can take your views on board and represent a wider range of opinion in our own response. 

What do DCMS want?  This is a call for evidence. Hard facts are difficult to come by due in no small part to a problem symptomatic of a (the?) key issue; the rapid loss and ongoing lack of transparency around who’s is now trading, where and when, at what scale. Regardless of the absence of quantitive data, we do need as many organisations as possible to submit evidence, anecdotal or otherwise and/or well informed, professional opinion, in order to make the case for “registration”. preferably grounded on an established foundation of common understanding. 

The only people who actually know precisely who is selling what where, when are the platforms providers themselves.  Understandably perhaps, they appear to be selective about what they tell whom.  There are also a very small number of commercial research companies that “scrape the platform’s data” like AirDnA. Few destinations can afford their services and typically any damaging insight that might be exposed is often then actively refuted by well financed and organised platform providers, like AirBnB.

The history.  There is written evidence of call for a national accommodation registration scheme (rejected) as far back as 1959, in all likelihood this was by no means the first time it had been suggested. The case for it was made much more forcefully in the late 60’s and reflected in the inclusion in the 1969 Development of Tourism Act (page 18 par 17) of the Act’s provisions: “Her Majesty may by Order in Council make provision for the registration by the Tourist Boards of, or of any class of, hotels and other establishments in Great Britain at which sleeping accommodation is provided by way of trade or business”.

The potential scope laid out in the Act which follows the above quote is quite broad and interestingly the maximum penalty, then £200, for failure to comply quite severe.  This part of the development Act was never enacted in England. It was subsequently adopted in Northern Ireland on all forms of accommodation provision. Similar provision is/has recently been agreed and is being adopted for short-term lets in Scotland and registration is now also under active consideration in Wales.

A call for “statutory registration” has continued off and on ever since 1969. Notably resulting in, the less difficult option, of the national harmonised quality standards (1999), seen primarily as a means of bring the then particularly wayward smaller guest, boarding houses and hotel sector in line with safety and other proscribed, as well as more qualitive, standards.  The primary driver throughout from 1959 onwards appears to have been around improving poor standards and failures in regulatory standards perceived to have been upheld by some. The principal reason registration was not adopted, in England at least, has been a broad-based resistance from the mainstream establish (and then the only) providers. Not unreasonably they saw little or no direct benefit in being drawn into a possibly onerous scheme to enhance the standards of others, at a potential cost to their own freedom of action.  Of note, the scheme subsequently adopted in Northern Ireland is predicated on a full inspection by NITB to predetermine that all statutory and other quality standards are met before anyone trades. It works for them.

What can we conclude from the history beyond that a registration scheme, if we get one in England, has been an inordinately long-time in the making?  In its simplest form this is the best opportunity we have had in 53 years since 1969 to make any real progress towards some form of national registration. It is an important but fleeting opportunity and if missed it will be at least 5 and more likely 10 or many more years before the issue comes to prominence again. More importantly perhaps, if a scheme is adopted, we will have to live with it, as adopted and with all of its consequences for a minimum of 5 to 10 years before any further review is likely to be considered.  In the rush to secure something out of this apparently unique opportunity, we need to conscious that what we get, if anything, needs to be fully fit for purpose, achieve the necessary objectives, effectively and do so both now and as far as is practically possible, well into the foreseeable future. 

Accepting something that does not achieve the necessary improvement, could well be a double-edged weapon. A scheme of any sort, would serve to shifting the responsibility for any failure to manage current and future risk from operators, platform providers and central government, towards or on to local destination management, local authorities and other enforcement bodies but without necessarily giving them both the information (transparency) and the means needed to adequately address and manage those risks on a larger scale and in greater numbers.

More recent developments. What has fundamentally change to encourage a department within a, low or minimal regulation leaning Government to even consider registration in any form?  Essentially the invention of the internet, the advent of online sales and the relatively rapid emergence of disruptor, online sales platforms with, in many cases, no legal responsibility or liability for the product that they promote and sell. This is a process that gone from virtually nothing to market domination in the short-term let market in under c 15 years.

The consequence of the new business models is that there is no longer a need to advertise your wears by giving it a name and painting it on the building put signs up in your garden or get it sign posted from the nearest road to attract passing custom. There is now no absolute need to engage with others, join the local or nation hotels, guest house or B&B association, advertise in the local guide or be on local websites or indeed have your own website, if you so wish. The new rules of doing business apply particularly to new entrant to it, of which there are many.

Accommodation can and often is now advertised anonymously via one or two national platforms, like Airbnb. The majority of these platforms, presumably for good commercial reasons never adequately explained, do not give contact names or a property address, even to the customer until a booking and payment is made.  The consequence of that is that if enforcement or other agencies wanted to identify these businesses, they are in the main, for all practical purpose, all but invisible. Not even old fashioned and highly inefficient walking survey of the destination’s patch will now give an accurate estimate of the number of premises, let alone produce the accurate, digitally accessible listing that is really required for purposes from informing accurate local value and volume estimates through the application of correct local taxation categories, to ensuring compliance with all the necessary consumer safety regulations.

Airbnb has grown from its origins in the USA in 2007 to having in a little over a decade, over a quarter of a million UK listings in 2020. These number continue to grow exponentially.  The growth of sharing accommodation provision and the short-term let market has had a number of serious implications for, among other things: the housing market, the growth of second and holiday homes and the availability of housing for long term rental or affordable purchase for locals residents and for the local resident workforce in many popular tourist areas (pretty much every rural and many urban areas) all of which has an increasingly clear knock-on effects on businesses performance and employment.    These issues have caught the attention of politicians, APPG groups, Select Committees and elevated concerns around, what was a purely tourism and therefore a DCMS issue, to a much wider and more hard hitting, cross departmental audience.  From a purely tourism prospective the big change has been a growing willingness, arguably even a strong desire from the established “old school” industry to seek a level playing field around the application of regulation and the associated cost base. Many established accommodation players now see “registration” as the way forward. Whether they would wish this to also apply to them or to what degree they wiling to be registered or even licenced themselves to achieve that level playing field isn’t as clear.  Unusually from a historic prospective DCMS now find themselves being actively lobbied by major parts of the accommodation industry in favour of registration, not against it.

What do we jointly understand by “registration”?  Registration is a means of officially recording something, usually according some, often legal, rights in exchange for the provision of detail that identifies the person being registered and them alone. Simple, classic examples include: births, deaths, marriages or the electoral registration all of which accord certain rights or end them. Many but not all registrations are free of charge, or come with a small one-off fee. The detail is usually only that necessary to confirm your entitlement to access the rights, typically names address or addresses, age, possible place of birth, nationality etc., but it could be more (or less?) complex. The essence of registration is to allow those that have a need or legal right to identify you as the person allowed to access a particular right, to do so accurately and with relative ease. In the case of accommodation, those detail would relate to those who own and run accommodation for commercial gain and sufficient detail about the premises and its usage to assess what regulation should be applied? 

A registration scheme could but wouldn’t normally make any judgement about whether you were a fit person to undertake an activity or whether the associated activity you intend to undertake, once registered, were being conducted correctly and lawfully within any applicable regulations.  Registration usually comes with censure for supplying false information to obtain that registration but seldom if ever, setting penalties for abusing the registration’s rights once granted. Those and everything else to do with the activity undertaken normally falls to other regulation and enforcement agencies and their associated powers to address any issues.  The act of registration is usually designed to identifies an individual and this instance the location and intent to carry out a trade. It is the transparency that the registration offers, that then allows the application of any regulation via other avenues by other means and always at a later date than the registration itself. 

Do we jointly agree that an accommodation registration scheme would/should broadly identify who is trading where, when and preferably to what scale?   Critically do we think registration is sufficient to address all the know issues commonly being experienced either directly simply by empowering/enabling those that need or can undertake enforcement, to easily and accurately identify who and what may need to be monitored and checked, probably on a risk-based assessment?  If not, what more is actually needed and why?

What do we jointly understand by licensing? Licencing (offered as possible route by the DCMS paper but not described) is a potentially very different beast from registration.  Typical examples of licensing schemes include: driving licencing or alcohol licencing both premises and personal.  Licencing generally requires individuals to demonstrate a level of skill and understanding to obtain the licence and to then meet specified standards and to maintain them thereafter under the threat of the withdrawal of that licence and the loss of the right to undertake the licensed activity.  Licences and/or meeting the ancillary standards needed to gain it, come with costs and fees, some ongoing, usually set to cover the full cost of management and enforcement. Penalties for breaches in obtaining licences themselves are generally harsh.  The penalty for breaching conditions once licenced, in addition to the temporary or permanent loss of licences itself, also tend to be severe.  Licencing is generally far more legally complex, more legally binding and far harder to set up than a simple registration, that typically relies on other existing regulation and enforcement to separately maintain order and to provide checks and balances. 

Do we have a common understanding of what licensing of accommodation prevision might broadly entail?  Do we think that some or all the issue being experienced as a consequence of a boom in short-term letting need to be addressed up front in and by a more formal and legally binding licensing scheme?  If so, what aspects and associated requirements needs to be licenced and how would or could it be best applied?

Other consideration regarding DCMS. The DCMS evidence gathering paper has done a good job of giving an overview of the tourism and wider housing and other issues.  The paper combined with previous statement makes it clear that DCMS are leaning towards a very light touch, possibly self-administered, self-certified online approach.  There is good reason to go down this route given the current administrations attitudes towards regulation in general and DCMS’s need to get broad departmental and Government sign off on any proposals going forward. Aiming low to get under a barrier may be a legitimate strategy or tactic but given what I have said about living with the consequences, I do have to question whether aiming higher albeit accepting the results are likely to be somewhat lower is a legitimate consideration. Recent political events and the even more robust stance on regulation promised by the two candidates for the PM’s position, do also need to be considered.  It is now entirely possible that even a very light touch approach could in the new political environment be viewed as an unacceptable proposal?

The DCMS paper, as I read it, appears to omit any recognition of the reality and the additional issues caused by the ownership of multiple properties, offered across single or multiple platforms, something which as an aside further exacerbating the lack of transparency. If I am right that omission needs to be widely challenged or it will become an accepted fact that the vast majority of platform users are only offering the use of spare capacity either in their main residence or in their sole second or holiday home.  I.e., confirming with the purposes and original concept of the sharing economy which is strongly supported by the current administration. Buying a single asset or multiple assets with the express intent of “sharing them”, potential 24/7/365 days of the year is patiently not within the original intent or ethos of the sharing economy and should and would be regarded as just another business activity as it would in any other situation.  Ownership of multiple properties needs to be acknowledged and addressed as a major issue within the sharing accommodation sector.

Equally, although the paper makes good reference to most of the wider issues relating to short-term lets, it misses a relatively new and rapidly growing problem for the tourism industry itself.  The removal of property from the market in general and the increasing move from long-term let to more lucrative short-term letting is serving to further denude the local workforce from an already (BREXIT) challenged employment market. If DCMS as the tourism industry’s sponsoring department fails to recognise the issue of being able to both live comfortably and work in a popular tourism destination, there is absolutely no chance that this increasingly serious issue will be properly recognised, let alone address by any other Government department.  The issue needs to be robustly evidenced and illustrated during this further evidence gathering stage.

In its simplest form the case is that while transient, overseas workers might have been willing to live for a period of time in the typical onsite accommodation provided for employees, or poorer quality, low-cost accommodation in the locality (caravan, HMO’s bedsits etc.), genuine local residents are less willing or able, say due to family circumstance, to do so, particularly for protracted periods.  The removal of affordable long-term lets or affordable housing to buy is exacerbating an already serious general weaknesses in the labour market.  There are now many examples of worker having to commute or be transported very long distance to and from rural and other destinations to service tourism jobs.  Given the nature of the work this is neither economically or environmentally sustainable. In many more destinations it is simply impractical, for example because there are no readily available source of workers living within commuting distances or no reliable forms of public transport or none flexible enough to cater for the wide range of often unsociable working hours.

Other considerations Airbnb. Airbnb as the largest player in this market has a very well-honed PR and lobbying capability.  Evidence from other countries shows that Airbnb typically resist all regulatory change until the last safe moment, at which time they generally offer a low impact, voluntary industry solution, in advance of any further action by governments.  They have followed the pattern in the UK, even claiming to be leading the call for action on registration, not reacting to it.  They have issued in advance of the Government’s consultation, a rather presumptuously titled “white paper”. 

In essences the paper proposes a very light touch, self-certification process. In return for providing very basic contact detail, “hosts” would automatically be issued with a registration number and be allowed to continue to trade immediately. It would then be up to the various enforcement bodies and agencies to use the access to basic contact details to assess what if any regulation should or should not be applied and what to do about it.  The white paper creates an entirely new notion of “commercial provision” and “non-commercial/amateur provision”.  Critically, the later including potential many, if not most of Airbnb’s clients in the UK, who would be exempt from any registration as a consequence. The need for registration for all practical purposes in Airbnb’s view would appear to apply only to those owning and operating multiple properties or letting a single property fulltime.

 Although plausible in places, their proposals do appear to contain some fairly obvious loop holes and, in my view, at least the concept of non-commercial/amateur provision is a dangerous nonsense and in itself also a massive loophole that could render registration ineffective against the highest risk and from those determined to avoid easy identification, or exclude those arguably in most need of it.  When there are known risks to life and limb the application of an essentially de minimis approach, is reckless, even if admittedly it is currently the approach applied to fire safety regulation and inspection (exemption for very small businesses etc.).  The notion of non-commercial/amateur status needs to be challenged. I would suggest that the criteria for inclusion in any scheme must be set at the provision of any overnight accommodation for any financial gain.

Airbnb’s premise that, at the most basic level the issue of a lack of transparency, needs to be addressed by a simple, cost-free registration is plausible but it avoids the elephant in the room.  Does having some basic contact and a trading address, actually empower adequate, appropriate checks, balances and regulatory compliance?   Ironically the lack of transparency, in large part, has been created by their business model and practices and it is arguably entirely within their gift to resolve. If they and others would change the information contained in their listings or volunteer detailed they already clear must hold on of who is doing what where and when to all the relevant regulators and enforcement agencies, we wouldn’t necessarily now be debating what a registration scheme needs to look like.

The wider and specific issues. The broader issues that the DCMS evidence gathering paper seeks to address are generally contained within the paper itself but that should be taken to mean that these concerns are necessarily accepted.  Issues like impacts on housing stock, hollowing out of committees etc. do need to be further evidence, preferable qualitatively and quantitively but any evidence, however tentative will help establish the need for positive action.  There is a very useful brief on the position as at January 2022 held in the House of Commons library.  A copy of that brief together with the consultation documents and response links can be accessed under the consultations’ menu tab of Britishdestination.net or go direct to our page on the consultation at:  https://wordpress.com/page/britishdestinations.net/18718

My instinct currently lies with recommending a robust registration scheme that gathers a broad range of information, backed by meaningful penalties for both omission and any subsequent misuse of that registration; a registration plus, but falling well short of formal licensing approach.  At best, I fully expect that we might get instead, a potentially weak and fluffy, self-completion, penalty free approach.  In both cases associated regulated areas would need to be addressed by existing regulatory and enforcement regimes. That necessitates an acceptance that any genuine transparency registration might delivered, may create a much greater workload and a demand for more resource to be found from somewhere at some point if the improved system is to work and work well. Rather than agonise over whether that a practical proposition I would prefer to look to argue for more resource when the need is proven.

Further considerations. There are two further areas that don’t appear to have been addressed anywhere else which I feel obliged to air.  The first is that a failure to address or even acknowledge the wide spread provision of unregulated accommodation is a real and significant reputational risk.  DCMS and Government need to recognise that both domestic and international travellers don’t question the quality and safety of sharing economy and other accommodation provision here in the UK, not because they are disinterested or unconcerned but because they naturally and not unreasonable presume that as a first world country the UK as a whole and England within it, would without question already have a first world system of ensuring no one could trade without proving compliance to basic safety and other regulation. They are right and anything less than that, is clearly very wrong. 

The accompanying notion that the modern system of user review has any meaningful influence on compliance with regulatory standards is a complete nonsense. Consumer reviews are largely about perceived qualities like the softness of the pillows and not about hard and fast issue like electrical, gas or fire safety. Guest are highly unlikely ever to comment on the qualities or even absence of a kitchen fire blanket, or that electrical equipment has or hasn’t been routinely tested.     The reality that someone can get up in the morning and decide on a whim to let their accommodation, fill in a simple online form and be promoted nationally and international that day or the next is beyond comprehension but that is essentially what our system currently allows. When and it is only a matter of when not if, this blatant failure to address this is exposed by some particularly unpleasant or large-scale incident it will have untold reputational damage for the tourism industry, UK plc and for all those whose action or inaction allowed it. 

Having been repeatedly made fully aware of the huge loophole in compliance and enforcement, if Government now choose either not to act or act in a way that doesn’t adequately address the problems, it will be the Government, Government Ministers and Departments and not the industry and regulators who should and will be held morally, if not legally accountable for that failure to act.  It is only a matter of time before the current lack of transparency and associated inability to regulate, enforce and advise will result in an incident at sufficient scale or of a nature that will publicly expose, what is by any reasonably standard verging on a national disgrace. Regardless of a wide range of competing pressures the radically changed and still changing circumstances need to be firmly gripped and accommodation for commercial gain, however provided by whoever needs to brought back under the appropriate and necessary regulatory controls.  That is now entirely in the hands of the DCMS in the first instance and the Westminster Government thereafter. 

Our task is to make sure that they not only have the evidence to justify appropriate action but also understand the associated consequences for Government of now failing to act on what is by any measure, a very obvious and ever growing loophole in the regulatory application and compliance to and across all accommodation providers in England.

I am reluctant to explore the detail of what the issues are that registration might need to address are, or what specific detail needs to be gathered by a registration or licensing scheme and how effective that might be, as there is already more than enough to consider above for one day.  If anyone see value in doing something more musing, around specific detail in advance of the response deadline, then I am happy to try and do so. Just ask.

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