Business leaders are braced for a greater impact from a controversial new tourism licensing regime than even they expected.

Concerns over the short-term lets licensing scheme come as one local authority at the forefront of its implementation said along with pressures from a planned visitor levy, or tourist tax, 80% of self-catering tourism firms would face closure.

The worrying statistic has been revealed by the City of Edinburgh Council papers that are being discussed today. Take five minutes to catch up.

What is happening with Airbnb in Scotland?

The Scottish Government has moved to address the impact of the rise of unregulated Airbnb-style short-term letting accommodation, including the effects on the supply of housing for residents and concerns over anti-social behaviour, with a licensing scheme.

READ MORE: Eight out of ten self-caterers in city to close

It comes against the backdrop of a rise in the number of Airbnb listings in the UK from 83,000 in 2016 to 339,000 this year.

What is the licensing scheme and when does it kick in?

The scheme is mandatory for all short-term let accommodation across Scotland, including holiday cottages, B&Bs, guest houses, pods, and yurts and it is due to go live on October 1.

So far, the majority of operators have not signed up. Local authorities have been given powers to designate control areas to manage high concentrations of short-term lets. 

Why are people not signing up for this?

Many consider it too onerous with costs ranging from £86 to £24,000 and there are concerns around planning permission. Industry insiders warn the cost of complying with the system can be prohibitive and additional red-tape and expense is said to be prompting people to exit the industry.

READ MORE: Anger over Humza Yousaf ‘disdain’ for Scottish tourism

The Association of Scotland’s Self-Caterers said its recent survey of around 1,270 short-let businesses found more than 60% of operators had yet to apply for a licence.

What will the impact be?

Tourism leaders say the scheme “risks criminalising” hard-working people who have operated small firms for decades, and there are fears the implementation of the scheme will devastate Scottish tourism and in particular jewels in the crown like the city of Edinburgh and the Highlands.

The ASSC, which represents over 1,700 businesses, said that “there should be legislation, but this approach is flawed and must be amended", and added: "Our worst fears have not only been realised, they have been exceeded."