Airbnb has launched a scathing attack on the SNP'The flawed' short-term rental policy, which claims it is driving tourists away from Scotland.
The $100 billion global accommodation company says tourists are avoiding Scotland because of the Scottish Government's red tape on holiday rentals.
Government rules require anyone renting out rooms or their home on a short-term basis to apply for a permit – which can cost up to £5,800 – from the local council.
Airbnb says the regulations are driving away visitors, especially to towns in the north of England, and depriving Scottish homeowners of much-needed money.
It also states that the licensing system has failed to deliver the promised benefits to local people.
Airbnb hosts say providers are losing out and that the new regulations are hurting tourism
Taylor Swift's fans can't find a room because the licensing system has reduced supply on sites like Airbnb
It is thought Airbnb will try to convince the Scottish Government to review and change the rules.
The latest damning assessment of the SNP scheme comes after The Mail on Sunday revealed the new rules had left Edinburgh's famous festivals facing an accommodation crisis, with the number of rental places in the city reduced by 90 per cent.
The crackdown on short-term rentals was intended to increase the availability and affordability of long-term rental housing.
But according to Airbnb, rents have actually increased.
In a report entitled Six Months On: An update on the impact of Scotland's short-term letting rights, the company concludes: 'The implementation of short-term rental rules in Scotland is damaging the tourism sector and limiting economic opportunities for local families.
“Despite the measures, they have had no positive impact on house and rental prices, which have reached their highest annual levels in almost a decade.”
Amanda Cupples, Airbnb's managing director for Northern Europe, added: 'Data shows that short-term rental rules in Scotland are not translating into benefits for local families.
Since the scheme came into effect, hotel and rental prices have risen, tourism is expected to suffer and families have lost a vital source of income.
“Airbnb has worked with governments around the world to balance the benefits of short-term rentals with local housing issues, and we hope to work with Scotland on policies that benefit everyone.”
Airbnb's attack follows warnings about the future of the Edinburgh Festival Fringe, with a number of high-profile figures claiming that accommodation in the city is now so expensive that acts can no longer perform there.
Former BBC presenter Gail Porter said she was 'priced out' for doing a show in her home city, while comedian Jason Manford said the Edinburgh prices were an 'absolute joke'.
Meanwhile, demand for sold-out events like Taylor Swift's June concerts has also helped push prices to stratospheric levels.
The rules requiring municipalities to operate a licensing system for short-term rentals came into force last October.
Anyone renting out anything, from a single room in a shared flat to an entire castle, as well as rooms in B&Bs and guest houses, must apply for and pay for a permit.
The rules were aimed at curbing the number of short-term rentals, especially in Edinburgh, where some residents complained of being swamped by visitors.
However, tourism organizations and accommodation providers warned that the rules were draconian, costly and created a huge administrative burden, hurting businesses already struggling with inflationary pressures and the legacy of the pandemic.
Tory MP Murdo Fraser said: 'This damning report shows the damaging reality of the SNP's flawed short-term rental policy.
'Tourists are turning their backs on Scotland and small business owners are under fire.'
Airbnb was founded in the US in 2008 and is now the world's best-known online short-term rental site.
It advertises approximately five million properties in 100,000 towns and cities around the world. The company believes that the new rules in Scotland are having a negative impact.
Gail Porter says she has been priced out of the festival
The report said: 'The disruption to supply will limit accommodation options for guests, limit earning opportunities for families and harm small businesses that rely on visitors to Scotland.'
Airbnb also pointed out that the introduction of the licensing regime has not resulted in long-term rentals becoming cheaper for residents.
It said: 'Long-term rental prices increased by 6.8 per cent in the 12 months to January 2024.
This increase is the highest annual figure in more than a decade, indicating that the new rules for short-term rentals have not immediately resulted in improved rent affordability.”
Airbnb claimed that some visitors are heading elsewhere, stating: 'With fewer options available, travelers are now increasingly turning their attention to the north of England.
'Cities such as Liverpool and Newcastle have experienced an increase in searches, suggesting they are becoming attractive alternatives for travellers.'
Catherine Sutherland, an Airbnb host from Edinburgh, says providers like her are losing out.
She added: “The regulations are hurting tourism. People are struggling to find affordable accommodation and are effectively being excluded from visiting Scotland.”
The Scottish Government has defended the licensing scheme. It said: 'The number of foreign visitors to Scotland has recovered from the pandemic faster than the rest of Britain.
'The introduction of permits gives guests certainty about safety and quality.'