Recently, I had the pleasure of attending the Scottish Agritourism Conference in Perth as an exhibitor with Thorntons. Prior to becoming a solicitor, I studied and worked within the tourism industry in Scotland, so I am always happy when the opportunity arises to combine my current career with my knowledge and experience in tourism.
During the conference, we heard from several different speakers; some of whom own, operate or work within various different agritourism businesses all across Scotland; MSPs; and many others from sector bodies and other key stakeholders to the agritourism sector. Additionally, there were also international speakers from New Zealand and India who gave their insight into some of the challenges the agritourism sector faces in their home countries, which provided interesting comparisons to our own.
Diversification Squared
One of the key messages that came across at the conference was to keep diversifying, even if you have already done so. For example, if you have already started an honesty box at your farm for home baking or fruit and veg, can you then open a farm stall, or supply produce to other local shops and cafes? If you have a café or farm shop on site, can you then start some form of animal petting experience or school educational visits? If you have an unused barn, can you repurpose it for use as a function space or to offer overnight accommodation? These are the sort of opportunities that are key to keeping visitors at your business for longer and help to grow and diversify income streams.
Challenges
Of course, diversifying is not an easy task and requires thought on a number of different elements including how the project will be funded; what relevant legislation you will need to be aware of and abide by; if you will require any specific permissions or licences, such as planning permission or a short term letting licence, and also what tax implications may arise from a new business or a change of use, which may be more important than ever in the wake of the recent Budget announcement.
You may already be familiar with the Short-Term Letting Licence regime, which was initially introduced in 2023, and with some of the rather significant changes which subsequently came into force in August 2024. We have already written about these changes, and you can read the article here. In essence the main changes are:
- Licences are now transferrable on the transfer or sale of a property;
- Hosts can apply for a provisional licence whilst construction of the Property is ongoing, which can be confirmed once construction is complete;
- Hosts can obtain a temporary exemption on the need for up to 3 periods not excluding a total of 6 weeks in any calendar year;
- It is now a requirement to provide additional instructions for items such as carbon monoxide alarms and mobile heaters.
Another challenge, which is likely to have a significant impact on the agritourism sector going forward, is the proposed local visitor levy, or so-called “tourist tax”. The Visitor Levy (Scotland) Act 2024 will allow local authorities to decide whether to add a charge to overnight accommodation across Scotland, with some local authority areas suggesting a tax of up to 5% of the accommodation cost. This is likely to have an impact on potential visitor numbers into areas of Scotland which might cause some people to think more about whether an accommodation offering is the right type of diversification business for their needs.
These are just some of the challenges which might be faced when considering diversification. However, as a full service law firm, we have colleagues able to provide expert legal advice across all aspects of your agritourism business. Thorntons are able to assist with concerns both around your existing business, or a new business venture and would be delighted to collaborate with you and other professional advisors. Please do get in touch so we can help you take the next steps in your diversification journey!