SAVILLS INSIGHT

“2024 showed improvement over 2023 for many holiday accommodation owners, which is noteworthy given the challenges faced by the sector. However, uncertainty persists around future regulations and consumer confidence due to increased living costs and poor summer weather in the UK. Early 2025 shows promise with many reports of strong booking levels.

“There is a growing perception that classic destinations such as Cornwall are saturated with overpriced offerings due to high demand, which may now have started to make an impact. Devon, Cornwall and Wales achieved lower occupancy rates than they have for the past few years¹¹, possibly suggesting that guests needed more convincing to pay premium rates.

“Due to challenging market conditions, guests increasingly book later and opt for shorter stays. Customer expectations remain high, and the quality of the accommodation offered is usually more important than the number of nights. To increase occupancy, owners must be realistic about the price point, at least in the short term. Offering an early booking deal or a ‘book now pay later’ option can boost forward bookings.

“High-quality cabin and treehouse accommodation is still achieving high occupancy, especially those focused on experience, wellness and sustainability. These are critically important factors, particularly for Millennials and Gen Z, who account for an increasingly significant market share. Unique accommodation continues to draw guests in, with ‘unusual places to stay’ seeing a 242% increase in website traffic during 2024 compared to 2023⁹. Small spaces catering to lower budgets while still offering a full experience are increasingly popular, with Canopy and Stars recording an 850% increase in shepherd huts being offered to meet demand.”

Industry Insight

“Last year was slightly better than 2023 in terms of occupancy. However, it’s become a very price-sensitive market and guests are looking for deals. Interestingly, they are less likely to downgrade the quality of the holiday property and will instead reduce the length of the stay. This fits into a wider shift seen towards shorter breaks in cottages and lodges.

“In 2025, we expect to see a continued recovery. Occupancy on cottages are currently picking up, but people are booking later. It is important that property owners are not too precious on price and should focus on building their customer base and reputation with positive reviews to ensure strong demand.”

Joe Cross, Director of Strategy & Finance, Sykes Holiday Cottages

“The resilience of Scotland’s self-catering industry is being tested by evolving guest expectations, tighter regulations and market fluctuations. While the sector is facing uncertainty – particularly around short-term let licensing, taxation changes and the cost-of-living crisis – there are opportunities for growth. Increased international interest, eco-conscious tourism and the demand for authentic local experiences provide a chance for self-catering businesses to adapt and thrive. However, for this to happen, we need a level playing field, clear regulatory frameworks and strong industry support to ensure Scotland remains a top destination for visitors.”

Fiona Campbell, CEO, Association of Scotland’s Self-Caterers

2024 IN NUMBERS

England

• The North East, East Midlands and West Midlands have the fewest short-term rental properties and, subsequently, the lowest number of nights reserved. However, they continue to show the strongest growth in both supply and nights reserved in recent years.¹⁰

• The distribution of nights reserved across the UK follows a similar trend to that of supply, with the most nights reserved in London, the South West and the South East in December 2024.¹⁰

Scotland

• Average occupancy for self-catering properties in 2024 was 41.6% versus 43.1% in 2023. The most popular locations (in terms of occupancy) were Shetland (82.5%), the Outer Hebrides (65.3%) and Ayrshire & Arran (63.1%).¹²

• 5-star properties continue to be the most popular (59.2% occupancy); however, 3-star properties (50.9%, representing 6% year-on-year growth) have outperformed 4-star properties (46.6%).¹²

Wales

• Of all regions, Wales has the steepest decline in occupancy rates since 2019 (-6%), reflected in the lowest occupancy rates in December (38%).¹⁰

HOLIDAY ACCOMMODATION INDUSTRY NEWS

Short-term let licences

In Scotland, short-term let licences are mandatory for anyone offering accommodation for short-term stays. The law, updated in 2024, requires prospective hosts to obtain a licence before taking bookings or receiving guests. Operating without a licence can result in fines up to £2,500 and a one-year ban from applying for a licence.

Planning permission for short-term lets

The Ministry for Housing, Communities and Local Government (MHCLG) announced proposed changes to short-term lets in England, which should come into effect this summer. As part of these changes, people may be required to apply for planning permission from their local authority to turn their home into a short-term let. The rules will not apply to people renting out their main home for less than 90 nights a year.

Energy Performance Certificate (EPC) for short-term rentals

The MHCLG is consulting on requiring EPCs for short-term lets, which would bring them under the Private Rented Sector Regulations. This change aims to improve energy efficiency, prevent landlords from avoiding regulations and protect tenants in areas with housing pressures.

Visitor Levy introduction across the UK

Local authorities across the UK have the power to introduce a visitor levy (VL) that is charged on the purchase of overnight accommodation. The levy aims to raise revenue for public services, support jobs and growth, encourage sustainable tourism and enhance the visitor experience in the long term.

Wales

Following public consultation, Minister Rebecca Evans announced in March 2023 the intention to develop the Visitor Accommodation (Register and Levy) Etc. (Wales) Bill, which was introduced to the Senedd in November 2024. The VL rate is set in the Bill as 75p per person, per night for stays at campsites (pitches) and hostels – and £1.25 per person, per night for stays in all other types of accommodation.

Scotland

The Scottish Government passed the Visitor Levy (Scotland) Act 2024 in May 2024. It will be for each local authority to decide after consultation, whether or not to introduce a VL scheme. At the time of writing, the City of Edinburgh Council has voted to introduce a VL; from 24 July 2026, a levy of 5% on overnight accommodation will be applied (to a maximum of five nights). Several other local authorities are currently considering one.

England

Currently, in England, there is no primary legislation permitting a tourist levy; however, many cities like Manchester and Liverpool are using legal workarounds to implement a form of VL. They have introduced a Business Improvement District specifically for hotels and other accommodation providers, allowing them to add an additional charge to the customers’ bill.

⁹Canopy and Stars Market Report 2025 ,¹⁰VisitBritain Short-Term Rental trends report from Lighthouse, ¹¹VisitBritain Great Britain domestic overnight trips 2024 report, ¹²VisitScotland Scottish Accommodation Occupancy Survey, Self-catering November 2024

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