Hotel rates in Edinburgh during the festival period are at the “limits of tolerable”, MSPs have been told.
Faith Liddell, director of Festivals Edinburgh, said soaring accommodation costs during August could potentially put the city’s reputation at stake.
Research by hotel price comparison site trivago found that rates in Scotland’s capital increased by 36% to £196 during the Edinburgh Festival Fringe, which runs between August 1 and 25.
It found an overnight stay cost an average of £196, up from £144 per night during July.
Ms Liddell was questioned by members of Holyrood’s Economy Committee on the costs for tourists and artists visiting the city during an evidence session on the economic importance of Edinburgh’s festivals.
Festivals Edinburgh, the organisation created by the directors of Edinburgh’s 12 major festivals, regularly raised concerns about the issue, she said.
Ms Liddell told MSPs: “There is an issue about not interfering too much and allowing it to operate as a market.
“But we do need to think about the visitors as well and I know that it is definitely being talked about that it is at the limits of tolerable.
“The hoteliers are there to make a profit within the market place. We do feel that we’re at the stage where they need to look at it as well as a risk to all of us.
“The conversation we are raising is about city reputation, and that is in all our interests.”
The city’s festivals generate £261 million of economic impact for Scotland and 5,242 full time jobs in Edinburgh, according to figures submitted to the committee.
Ms Liddell said they face a number of challenges to ensure that success continues, including responding to competing cities that want to “knock us off our perch”.
She added: “The contracting public purse and pressures on both council and broader government budgets are a threat to us.”
The Festival Forum, a body that oversees the strategy of the city’s festivals, has recently appointed consultants to review the success of and risks to the festivals, and develop an action plan for the next ten years.