Airbnb has ripped into politicians in Scotland who have implemented restrictions on short lets.

The former SNP-Green coalition government allowed local councils to implement strict licensing and enforcement rules on potential

New analysis by the online platform suggests that the implementation of short-term rental rules in Scotland is harming its tourism industry and limiting economic opportunities for local families. 

Despite these measures, they have not delivered positive impacts on housing and rental prices, which have reached their highest annual rate in nearly a decade, according to UK government data. 

Airbnb categorises the problems caused by Scottish politicians like this:

Soaring Rental Prices: Data indicates that the rental sector is witnessing a significant surge in rental prices. ONS data reveals that long term rental prices surged by 6.8% in the 12 months leading up to January 2024, surpassing the previous rate of 6.3% in the 12 months to December 2023. This increase marks the highest annual rate recorded in over a decade (2012), indicating that the new rules on short-term lets have not immediately resulted in improved rental affordability;

Hotel Prices Surge: Since October, Scotland has seen a rise in hotel prices, prompting some individuals to reconsider their visit. According to Lighthouse, Edinburgh hotel prices have risen by 9% in 2024, as part of an overall increase of 82% since 2019. Notably, this price surge was more pronounced during popular months, with an increase of 14% in April, 21% in May, and 12% in November. Airbnb says: “As prices continue to rise, the dream of exploring Scotland becomes out of reach for many, especially for families and groups who need multiple hotel rooms, while the local people and businesses that rely on travel tourism suffer from the consequences.”

Licensing Scheme Impact: Scotland’s accommodation sector is currently experiencing a disruption to supply that will limit accommodation options for guests, restricting flexible earning opportunities for families and hurting small businesses that rely on visitors to Scotland – especially outside of typical tourist hotspots. As of April 2024, Edinburgh Council has granted only 29 per cent full licences for short-term lets, raising concerns about the city’s ability to accommodate visitors – especially during the upcoming peak summer period and festivals;

The ‘Taylor Swift Effect’: Ahead of American pop star Taylor Swift’s highly anticipated Eras tour in June, the demand for hotel rooms in Edinburgh has skyrocketed. According to a study by Lighthouse, average hotel room prices in Edinburgh inflated by a staggering 84% to £473 for stays during the first week of June. Other tour cities, such as London, experienced a more moderate increase in hotel prices of 9%, while Cardiff saw an increase of 29%;

Shift in Travel Trends: Despite the limited supply and soaring costs in Edinburgh, data from Airbnb indicates that the searches for stays in the city remain high. However, with fewer options available, travellers are now increasingly turning their attention to the north of England. Cities such as Liverpool and Newcastle have experienced a surge in searches, suggesting they are becoming attractive alternatives for travellers seeking unique experiences.

“Data shows that Scotland’s short-term rental rules are not translating into benefits for local families. Since the licensing scheme has been in place, hotel and rental prices have increased, tourism is expected to suffer, and families have lost a vital source of flexible income. Airbnb has worked with governments across the world to balance the benefits of short-term rentals with local housing concerns, and we hope to work with Scotland on policies that benefit everyone” says Amanda Cupples, Airbnb General Manager of Northern Europe.

In Scotland, the typical Host shares their home for an average of just under 4 nights a month, with nearly half of them relying on the extra income to meet rising living costs. 

Airbnb claims that “many of these hosts are everyday people who create unique and personalised travel experiences, contributing to the local economy and supporting their communities.” 

The platform cites a study commissioned by Airbnb which found that in 2022, Airbnb stays contributed £409m in Gross Value Added, providing a much-needed boost as travel recovered from the pandemic. The money spent by Airbnb guests and Hosts played a vital role in supporting an estimated 15,100 jobs across Scotland.

Airbnb explains that it has been actively supporting Hosts during the implementation of licensing rules in Scotland. 

Over 3,000 Scottish hosts have participated in online and in-person events organised by Airbnb, which aimed to help hosts understand the new regulations imposed by the Scottish government. 

Airbnb has also publicised a statement from an Edinburgh landlord, Catherine Sutherland, who says: “The regulations were poorly thought out and are hurting the tourism sector. There is now a limited supply of short-term lets in Scotland meaning people are struggling to find affordable accommodation and are effectively blocked from visiting Scotland.  

“The process to get a licence is challenging and takes a long time – I submitted my application in September 2023 and it was only approved this April. I am renting out rooms in my home on Airbnb, but those seeking a licence to rent out entire properties as short-term lets are facing much longer waits. Not only this, but people are having to pay upfront costs which can amount to thousands of pounds for some, with no guarantee that their application will be approved, causing a huge amount of stress. 

“My only income comes from short-term lets at my homeshare on Airbnb and another property which I Co-Host. Small businesses like mine are suffering.”