STAA’s Merilee Karr on Regulations and Responsible Growth
In the second part of our two-part interview, Merilee talks about responsible hosting, being a good neighbor, and the positive impact of STR.
Discussions about STR regulations and sustainable hosting are central to the future of the industry, but can be difficult for hosts to follow due to their complexity. To untangle this topic a little, we sat down with Merilee Karr, chair of UK STAA, the UK Short-term Accommodation Association, and CEO of UnderTheDoormat. She talks about responsible growth, being a good neighbor, and the positive impact of STR that’s often overlooked when the media chooses to focus on the negative sides.
Minut: Welcome back, Merilee! Today, we wanted to direct our conversation to the broader topic of industry opportunities and challenges. STAA brings together members from all branches of the industry. As the chair, what do you see as the overarching vision that unifies them all?
Merilee: The overarching goal of the industry is to support the responsible growth of the industry. We want to make sure that as the industry grows, it does so in the best possible way, because when you grow responsibly, you actually enable that larger sectoral growth. .
This way, we can avoid things like bad regulations coming in or damaging the reputation of the industry in consumer perception. Along with that, it enables further growth - that's really important, because every business in the industry has aspirations for their own growth.
So that's why those two things have to come hand in hand. We believe that if we can help the sector grow responsibly, then all of the businesses operating within it are going to have every chance to be successful in the market over the coming years.
And the more that we can grow the industry as a whole, the more room there is for more companies to achieve their growth plans within it. So that's really what the vision is - that overarching growth.
Minut: Could you explain what you mean by responsible growth? What does it take to grow responsibly for STR?
Merilee: Yes, absolutely. Growing responsibly has several different components and one of them is obviously following the regulations that already exist. I think one of the challenges for our industry is that often you'll hear in the press that other more traditional sectors - whether it's the hotel industry or the long-let industry - will say we're an unregulated industry.
Well, that's not true. We are regulated. There’s a whole host of regulations that apply to us. Actually, if you go to the policy section on the STAA website, you’ll see a list of regulations there. So anyone who's not clear on what regulations apply to the industry can just go there and see all of them.
They cover everything from fire safety to things like carbon monoxide and other health- and safety-related matters. They also cover things like consumer protection. Obviously, needing to refund customers if they're not able to travel has become very relevant over the last year. So there's a whole host of things that already apply to our sector - and that's not just in the UK, that's true everywhere in the world. There are a number of European regulations that apply to the sector for example.
So no matter where you are, understanding the regulations that apply to you is really important. What's also really important is that they're always changing. That makes it a little bit tricky, because if you're operating on your own and you just rely on talking to maybe a couple of other hosts, it’s difficult to know when the fire safety rules have changed and what you need to do differently.
Minut: With such a complex regulatory framework, no wonder it’s so challenging for hosts and property managers to always know if they’re following them correctly.
Merilee: That's often the value of an association like STAA - it’s that every time there are new rules, the association publishes them and therefore every member knows about them.
To give an example, if you're a short-term rental agency, you need to make sure that any home you manage has a gas safety certificate. As an agent, you actually need to keep that gas safety certificate on file yourself. So the owner of the property saying "I have one" isn't good enough.
You actually have to have it on file, because you have to be able to show it to a guest if they ask for it. That's a legal requirement, but I would suspect that there are lots of companies that don't realize that it’s their responsibility to do that. So that's just one small example of the kinds of things that are really important to know. And knowing the rules and making sure that you comply with them fully is one of the key elements of being responsible.
Minut: With the amount of tasks on a property manager’s plate, I’d imagine researching new rules is not always top of mind.
Merilee: Of course, most of these things are only important when something goes wrong. So it's very easy to be like: "Oh, well nothing's ever gone wrong, I'll worry about that later" until something goes wrong. Then all of a sudden you don't have the things that you need to have to demonstrate that you've done things properly.
And that's when you can end up in a legal battle or awful things can happen that can have a really, really detrimental impact on your business. So again, they're not the sexy things to talk about, but they are the things that really matter.
Minut: And their impact can go beyond just the property manager or that particular company...
Merilee: Of course, for the industry, what we want to avoid is situations where something goes wrong and a guest is injured. That would have a massively detrimental impact on everyone who operates in the sector, not just the operator for whom something's gone wrong.
When we talk about being responsible, it's also about all of us helping our colleagues in the industry who are operating alongside us to know how to do things right. Because, to be perfectly honest, especially when you're a young sector, if something hits the press, it has a tarnishing effect on everyone, not just the person that they talk about. So that's something for all of us to keep in mind - that we've got that bigger role in making sure that our other colleagues in the industry are also aware of these things and understanding their responsibility in it.
Minut: Is responsible growth mostly about regulations then? Or is there more to it?
Merilee: Responsible growth is also about the experiences that we give to our customers. It is making sure that customers have a great experience, and that the standards meet their expectations. Because at the end of the day, customers have a choice. They can book in a hotel, they can book in a B&B or they can book a short-term rental.
If we want them to come back to our industry, time and time again, every experience they have in our industry is going to determine whether they come back and also whether they tell other people that staying in a short-term rental is a great choice.
The power of positive feedback is of course always muted by any negative feedback. It takes 10 positive feedbacks to counterbalance somebody giving negative feedback once. So I think it's really important that every customer that touches our industry has those great experiences, because they matter.
Minut: So responsible growth is also about the public perception of STRs?
Merilee: Yes, and it's not just about every customer who stays with you. It's also the neighbors who live next door and the impression that they have. It's the buildings that we operate in. All of these things are, let's say, the factors that can create discontent.
If neighbors find noisy short-term rentals next door to them, they complain to their building and say "I want short-term rentals banned". Then the buildings say: "Short-term rentals are bad. My counselor, I'd like short-term rentals banned in our council." And the counselors go to the central government and say "I want to ban short-term rentals. How do we put more restrictions on them?"
So it all starts from those experiences that people have, whether that's things like health and safety and doing things responsibly in that regard, or just providing great experiences to the customers and the other people who interact with our sector. They are the things that matter in that bigger picture about whether we get more regulated, whether we get more limits put on our ability to operate our businesses...
Minut: So being a responsible host also means caring about the little everyday interactions?
Merilee: I don't think you can overlook those small things, like putting out the rubbish on the right day in the right place. When that really upsets the neighbor, that neighbor can then become someone who fights for the sector to actually get those restrictions. That's an incredibly linked ecosystem, which is why responsible is such a broad word. It isn't just one thing that you have to do to be responsible.
It's a whole host of things, which mean that our sector is respected, is seen as professional, and is seen as a sector where the people who interact with it benefit - be that the person staying, the neighbors, the buildings - that they know that they can trust us. I think responsible means trust, in the simplest form.
We need to demonstrate that we're worthy of trust from all those different audiences.
Minut: That's a great point about trust and the different audiences that you need to speak to. At Minut, we also talk a lot about being a good neighbor. I was wondering if you have any tips on how to communicate with the neighbors as a short-term rental owner or property manager.
Merilee: Yes, so the first thing is, as an industry body, we've created the buildings policy. We've partnered with a company called Locale to actually implement that policy through technology in various different buildings around the country.
I think that it solves a couple of things. Where problems happen, it's often because of transparency and visibility. Obviously, Minut helps when a problem happens because it's about solving it quickly so that it doesn't escalate.
The buildings policy is also about doing that. Anyone who lives in the building would need to register and confirm who is responsible for that property 24/7, and their phone number. The registration costs around £20 a year.
Now, if there's a problem, the building manager knows exactly who to call, and that might be a company that’s managing it for the owner. So if the owner's halfway across the world somewhere, the company is getting a call directly, and they can solve the problem. The owner might not even know about it until the problem is solved.
But for the building, it means they're not going: "Oh, we've got this problem. We have no idea who is responsible," and then they call the council, the police get involved... when actually it might've just been that somebody had the noise turned up too much.
In that situation, a notification from their Minut device might have actually solved the problem before the building manager even found out about it - but once the neighbor lets the building management know, at least then they've got that transparency to act and do something about it.
Minut: So the buildings policy makes it easier for building management to work with property managers.
Merilee: Yes, and it also confirms that whoever's doing short-term rentals is accredited. So that means they meet all the health and safety, and consumer protection standards - if it's a flat for four people, that there are only four people who can stay there, etc.
It also makes sure that they have the right insurance in place and that someone is going to be checking the passport details before the keys are handed over, so that the security and insurance of the building are protected. This way, the building doesn't actually have a legitimate reason to ban short-term rentals. We know the alternative is that everybody gets worked up in the building and then the building meets and puts a ban in place. So by having things like this technology, it's a way for us as an industry to provide a solution to the building.
By the way, it's also a solution for councils, who are then able to see the aggregated data of all the buildings within their area. That gives them more information about who's doing short-term rentals, but without passing on any personal data of the individual hosts.
Minut: Seems like a simple enough solution to a quite complex problem?
Merilee: It's a really simple system, but it just allows that transparency for everyone in the food chain. This way, problems get solved straightaway, they don't escalate. And that means that short-term rentals are seen as a positive element of what's going on, rather than a disturbance or a problem that's creating extra work for the building, the councils, etc.
The reality is most hosts either want to do it themselves and are around and wanting to do it well, or they simply appoint a company. That's why companies like UnderTheDoormat and SpotHost have the accreditation. It also means that hosts who realize it's actually too much for them to do on their own and want to appoint a company can look up the accredited companies in that building system and contact them.
Minut: You talked about being a positive element of the neighborhood - I think that's often overlooked in the dialogue that's in the media about short-term rentals. Could you speak to that positive impact?
Merilee: Yeah, it's really simple actually. Short-term rentals disperse tourism dollars. So, at its most macro level, it means that more cafes, more restaurants, more small independent shops get to benefit from the tourists who are coming and spending money, wherever it is that they're visiting.
Whether that's in a city like London, where it spreads it out across more neighborhoods and in a broader geography. Or whether that's in new geographies, where there never was accommodation for people to stay in and all of a sudden, those communities now have people coming and visiting them.
So it helps to disperse that tourism dollar. What it also does is it disperses the income generation. It means that local families are able to earn some extra income from their property and obviously spend that money again in their local community.
That's fantastic, because it means that local businesses almost get two wins. They get the win from the guests coming to stay, and they also get the win from those local people having more money to spend, to go out to restaurants or on a new dress.
Minut: And in the traditional tourism sector you wouldn’t get those wins?
Merilee: In the traditional sector, yes, you do have small BnBs where a lot of that income would stay in the local community, but you also have big multinational hotels, and money that goes back into massive real estate, investment trusts… That money doesn't necessarily go back to the local community in those situations.
So I think that's one of the really great things about our industry, and something which I don't think gets talked about enough. But what we’re seeing now that short-term rentals were closed for periods over the past year, is those local communities recognizing how much of an impact they do have on local businesses. And that's why in places like Wales for example, there were talks about opening up short-term rentals first for Easter - because those local communities are suffering when we aren't there and able to provide those additional income sources.This is part two of a two-part interview. Read the other part here