John McLellan: Uproar over £400 budget hotel room misses big picture

Economy convener Councillor Gavin Barrie
Economy convener Councillor Gavin Barrie
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In the wonderful world of automated pricing driven by online activity, no wonder the price of a room in an Edinburgh budget hotel can go from £400 on Hogmanay to £40 a week later.

It is, as economy convener Gavin Barrie says, supply and demand, but we don’t know if someone was either mug or desperate enough to pay that amount.

However, that the activity drove the price up to such a ridiculous level is a pretty good measure of the effect of limited capacity versus peak demand.

READ MORE: Edinburgh’s £400-a-night hotel rooms come at a cost

As Councillor Barrie says, more hotels are in the pipeline and the only way to level off prices is to increase supply.

The issue is what to do with the capacity when £40 reflects demand.

That’s as strong an indication of how much slack Edinburgh still has to take up.

READ MORE: Edinburgh’s hotels hiked prices 344% for Hogmanay