The issue of homestay rentals and managing short-term lets within council boundaries Historically, tourism and visitor economy businesses were just that; professional businesses that operate in the same way as other businesses in their area, paying rates and taxes, operating within legal and regulatory frameworks and being transparent and accountable.
More recently however, technology has facilitated the advent of the sharing economy, helping disruptors to transform large sectors of the market, including overnight accommodation and taxi platforms for example. In principal, these platforms are inconsequential to councils, but it is how the platforms are used that offers cause for concern. Most pressingly, platforms like booking.com and Airbnb have given rise to homestay rentals, who offer tourists the opportunity to live like a local in towns and cities, but don’t register as a business, and often bring with them potential risk to the safety of guests.
Many have argued that the sharing economy is just what is needed; releasing previously unavailable accommodation spaces, providing healthy competition to traditional businesses and helping to raise standards, not to mention responding to the age-old aspect of supply and demand. Indeed many of these arguments are fair, at least to some extent, but they certainly don’t represent the full picture, nor is there a level playing field between homestay renters and their business counterparts.
While there were thousands of successful, incident-free stays last year, the sharing economy was not without its horror stories and globally they abounded. Instances of human trafficking, a balcony collapse, a ceiling collapse, condemned buildings being rented, a fire, five people dead in a shooting, hidden cameras and fraudulent listings were just some of the problems and yet there is no one taking responsibility for the overarching issue. What would happen if one of these incidents was in your region? Who would be liable and what responsibility would local government have for resolving the issue? It appears that there would be a lot of pressure on local government, given that safety and regulation are both expected by potential guests, with 72.85% assuming that the places they stay are regulated and 77.2% calling for regular, independent inspections of all properties, according to our survey.
Councils are just now beginning to tackle the issue, dealing with the less attractive realities of compromised consumer safety, loss of potential revenue from unregistered accommodation providers, competition for and loss of long-term private rentals in favour of short-term lets, not to mention the lack of accountability and transparency in the sector. Short of checking every platform, every day for every listing, there is simply no way at present for councils to hold these amateur providers accountable, which is why many leaders are considering mandatory licensing or regulation as a potential solution to the problems. This will solve one part of the issue, creating a level of accountability and transparency, but it is essential that the solution does not compromise the industry’s ability to innovate and respond to market conditions.
In addition, licensing does not in any way present the answer to benchmarking in the sector, support potential bookers to compare between hotels, and homestay rentals, and nor does licensing provide an inspectorate to validate the safety.
So what can councils do to tackle the issue?
Some places are already taking a proactive approach, with Scottish Parliament moving to license all short-term lets; meanwhile Cornwall Council has entered a primary authority partnership with Quality in Tourism. There is not however a definitive framework which has been established by local authorities and many are concerned about the breadth of solutions being considered across the country.
What is essential that councils prioritise management of this sector early to avoid implementation of knee-jerk strategies that are cumbersome and costly following potentially challenging court cases.
For a full guide on consumer safety, consumer expectations, the extent of the problem and how to manage it, download our free white paper for councils at www.qualityintourism.com/safety-standards.
Deborah Heather is director of Quality in Tourism