A letter with over 1,500 signatories working in Scottish tourism has been sent to Humza Yousaf urging him to pause plans for all short-term lets – from self-catering units to B&Bs, or people sharing a room of their home – having to obtain a licence to operate.

The letter, signed by small accommodation businesses, hosts and the associated supply chain, implores the First Minister to save the industry before it is too late. More than 60% of signatories come from rural Scotland, highlighting the disproportionate effect of the regulations on the most rural and remote communities.

In a “final plea” to the Scottish Government ahead of the looming 1st October deadline, the 1,581 signatories come as MSPs are to debate STL licensing on Wednesday in the Scottish Parliament.

The letter points out that industry has always been pro-regulation, insisting that health and safety is paramount, but that legislation needs to be paused to reset the balance between the Scottish Government’s ambitions with those working in self-catering and other associated businesses.

It sets out a collaborative approach, telling of the eagerness of the sector to get around the table to discuss solutions that meet policy objectives but which will also protect livelihoods. It believes that the licensing scheme pursued by the Welsh Government would secure just that whilst removing the “complexity, regional variations, red tape and enormous costs of its current scheme”.

As the letter notes, the “far-reaching implications and sheer number of businesses and people affected cannot be overstated”, hitting not just self-catering holiday homes, but “B&Bs to guest houses to cleaners to restaurants to taxi drivers.”

The letter ends by telling the First Minister that “the fate of Scotland’s tourism industry and the communities that depend on it, rests in your hands.”

Fiona Campbell, CEO of the Association of Scotland’s Self-Caterers, said: “This letter is yet another powerful indication of the strength of feeling within our sector about the impending disaster that is short-term let licensing and the harm it will cause those working so tirelessly in the Scottish tourism industry.

“The message to the First Minister is loud and clear: please listen to those who work day-in, day-out in our sector, pause your scheme and work with us on a viable, proportionate and balanced alternative that won’t cause untold damage to Scottish tourism. Let’s work together to put things right.”

The Scottish Conservatives will use their parliamentary business slot tomorrow to debate the regulation of short-term lets and call for a 12-month delay to allow for proper engagement with operators pending changes to the scheme.

Shadow business and tourism secretary Murdo Fraser is urging SNP backbenchers and members of other parties to listen to the concerns of business and back the Scottish Conservative calls.

Mr Fraser said: “Ministers must see sense, listen to businesses and pause these destructive plans before it’s too late.

“This scheme – however well-intended some of its provisions are – is going to have huge and catastrophic unintended consequences if it goes ahead next month.

“It was designed to tackle problem city-centre units, but B&Bs, guest houses and those seeking house-swap arrangements will now be hit with crippling additional costs and bureaucracy.

“There is a real danger this will destroy small businesses and have a huge knock-on impact on the wider Scottish economy.”

Rural business organisation Scottish Land & Estates (SLE) added its voice to the calls for the deadline to be extended. It said that measures to comply with licensing, such as obtaining various types of certifications, were simply unfeasible for many businesses given the shortage of contractors in rural Scotland.

It added that many members were facing six-month waits or more to be able to get a booking arranged with tradespeople.

Stephen Young, director of policy at Scottish Land & Estates said: “Rural Scotland, far more than urban areas, is heavily dependent on tourism for its economic and community success. If the Scottish Government chooses to proceed on the path it is on, it may well be to blame for hundreds if not thousands of these businesses closing, with the resulting impacts on other local businesses such as retail and hospitality also needing to be factored in.

“The Scottish Government has dismissed calls for an extension to the licensing registration deadline in recent weeks, citing the fact that registration has been open for many months. This is factually incorrect as the earliest that an application could be made to a local authority was 1 October 2022, and in some areas this licence application process has only been in full operation since February 2023. This has meant that some hosts and operators have only had seven months to obtain the relevant supporting documentation and additional certifications required just as they were entering the busiest part of their year. Specialist contractors were, and still are, giving six month waiting times for work to be undertaken in rural areas.

“Businesses are not refusing to register out of obstinacy, but out of a total lack of faith that this is a workable or proportionate scheme, and because it doesn’t recognise unique challenges in the provision of rural accommodation.”

The organisation added that First Minister Humza Yousaf has stated that he wanted to rebuild the government’s relationship with business and providing an extension was an opportunity to do so.

Stephen added: “Shortly after being appointed as First Minister, Mr Yousaf stated that he would personally engage with organisations representing the Short Term Let sector, but regrettably he does not yet appear to have done so. We are pleased to hear that the government recognises a problem and has a plan to address some of these difficulties. We do feel however that there is a need on the part of the Scottish Government to rebuild trust.

“One way of doing this would be to lift the deadline for registration, keeping registration open for businesses to apply, while simultaneously engaging with the industry and its representative bodies like SLE with an open mind to adjusting the scheme to ensure it is proportionate and workable in ways that will not see the anticipated closure of almost 60% of Short Term Lets and B&B business in Scotland over the next few months.

“There does also appear to be wide discrepancies between local authorities in their interpretation of the scheme and what is being asked of operators, which is leading to a further lack of confidence. We have also seen a successful Judicial Review of the scheme in Edinburgh City, highlighting the specific areas of concern around the way the scheme guidance is being interpreted. The judicial review process is extremely expensive and time-consuming, and it should not be the only way that poorly worded legislation can be corrected or improved to make it fit for purpose and in line with its original policy rationale.

“All of this is against the backdrop of the devastating effects of Covid lockdowns on tourism and hospitality, which are now being compounded by high electricity prices and interest rates. Doing business in these sectors is already very challenging without added regulation which, although having the laudable intention of solving a largely urban issue, is having the unintended consequence of endangering the viability of legitimate B&Bs and holiday let businesses who already have to comply with a great deal of existing regulation.”

Housing minister Paul McLennan said: “Regulation of short-term lets has been introduced at a time of significant growth and change in the sector, and to make sure that accommodation is safe, including gas safety certificates and suitable electrical equipment, as well as responding to community concerns on the impacts.

“Over the past four years, ministers in a range of capacities have engaged with the sector, listening and responding to feedback, this includes several meetings in recent weeks and months.

“We have already brought forward a one-off six-month extension to the scheme, which means existing hosts have had 20 months to comply with conditions and a year to prepare and submit their application.

“No operator to date has been refused a licence, among those who have already applied.

“The responsible thing to do is for everyone to get behind the task of encouraging and supporting those short-term let hosts that must apply for a licence before the October 1 deadline, in order to continue operating.”