Does Edinburgh need a cap on new hotel developments?

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Do we need to control the number of hotels being built in the Capital?

Edinburgh currently has a total of around 14,300 rooms in hotels, guest houses, hostels and serviced apartments across the city. And there is planning permission in place for thousands more.

Rooms for manoeuvre: The vision for New Waverley, launched in May 2014, included three hotels with 394 bedrooms

Rooms for manoeuvre: The vision for New Waverley, launched in May 2014, included three hotels with 394 bedrooms

Heritage watchdog the Cockburn Association has called for an immediate moratorium on any new hotels in the city centre, claiming the historic character and vitality of the Old Town is at risk.

But whatever the complaints, can it really be argued the Capital has too many hotels?

Edinburgh has a higher room occupancy rate – at 83 per cent – than anywhere else in Europe. Experts say that can go up to 96 per cent at the peak of the Festival in August.

Earlier this month research said hotel prices here were growing three times as fast as the UK average and Edinburgh was now the second most expensive place to stay overnight, behind London.

Yet the same week, the city was named as the third most popular place for staycations.

The laws of supply and demand suggest the Capital still has room for more hotels and more are being built.

Richard Branson announced earlier this year he had chosen Edinburgh as the location for the first Virgin hotel outside the United States.

The new St James development includes both a five-star W hotel and a Roomzzz luxury aparthotel.

And others under construction include a 98-room boutique hotel in Market Street.

But it was the plan for “pod-style” accommodation in a former courthouse in Parliament Square which prompted the Cockburn Association to call for a moratorium. It argues there has not been enough consideration of the impact hotels are having. “It’s the volume of people, waste lorries, delivery vehicles which have to service the hotels – it all has a negative impact on the community,” says Cockburn director Terry Levinthal. “A moratorium would allow us to step back and analyse what is happening.”

He acknowledges the importance of tourism to the Capital and the way market forces work in determining supply and demand. But he says the market can become “super-saturated” before a halt is called to supply.

Earlier this year the city council signalled it wanted a shift away from budget hotels to the higher end of the market. Figures showed that for the first time five budget chains – Premier Inn, Travelodge, Holiday Inn, Ibis and others – accounted for more than half the city’s stock of comparable hotel rooms: 4652 out of around 9300.

A report to councillors noted that lower construction costs and higher occupancy rates for budget hotels meant they could often outbid more expensive brands for buildings and land. “While this means Edinburgh is a relatively affordable destination by European standards, it reduces the ability of the city to attract high-spending visitors.”

Some industry insiders argue, however, that budget hotels are not necessarily just a “cheap and cheerful” option. They are popular with business travellers as well as holiday tourists. And their star rating often reflects the lack of a pool or a gym rather than a lower quality room.

Robin Worsnop of the Edinburgh Tourism Action Group, which represents the tourist businesses in the city, says the market follows the demand from consumers.

“Of course the city would like to attract premium brands into the city. If there is demand and we can create a market that attracts these people these are all good things. It helps with establishing more direct air routes which allows Scotland to attract higher spending visitors. It’s all part of a circle that is beneficial to the city and also to Scotland as a whole,

“There is obviously a lot of interest in Edinburgh and the fact we’re going to have the first Virgin hotel outside America is a great sign of its attractiveness as a destination.

“As the capital city and the gateway to Scotland these are all positive developments.”

But he agrees there needs to be a balance. “One has to be mindful of preserving the authenticity of the city and it being a living city centre. I do think residents and their interests have to be considered as well. It is all about managing and balance.”

Russell Imrie, spokesman for the Edinburgh Hotels Association, is naturally opposed to a moratorium. “I don’t believe there are too many hotels in Edinburgh. People all over the world want to come here and we need to accommodate them. We should not be putting a cap on the number of hotels.”

And he argues the benefits of tourism spread far and wide. “All these people coming to Edinburgh are using the bars, restaurants, retail, taxis, visitor attractions and they are adding to the economic wealth of the city.”

Marketing Edinburgh chief executive John Donnelly says in order to maintain its premium position and in order to attract conferences and cater for growing demand from wealthy tourists, the Capital needs more five-star hotels.

“The new direct air link from China will bring people who have an awful lot of money, who will be looking for that quality and richness of experience.”

And he dismisses the idea Edinburgh has too many hotels already. “The people who dictate whether there are too many hotels is the hoteliers. Hotel owners have very bright people who do big sums – they’re not going to build white elephants.”

The city council’s economy convener, SNP councillor Kate Campbell, plays down previous talk of trying to curb the number of budget hotels in the city in favour of more luxury ones.

“We know we have a need for more high-end hotels, but I don’t think that’s about stopping other hotels – it’s more about encouraging than controls.

“We’re very aware Edinburgh is an amazing city which attracts visitors from different backgrounds and there is a need for a range of accommodation. It’s about balance, not restriction.”

She says the council has no power or desire to impose a moratorium on new hotels.

But she says she understands people’s concerns about the city centre. “It’s a really big part of the character of Edinburgh that it’s a living city centre. We don’t want it to become like Venice where it’s just a tourist attraction. But tourism is hugely important to the city – it supports around 35,000 jobs and four star-plus hotels offer good quality jobs with career progression and decent wages.