'Manifestly unfair and unreasonable' - Edinburgh hotel's plea to turn lounge area into en-suite bedroom blocked by Scottish Government

Edinburgh’s No 11 Brunswick Street said in the appeal that they could be hit financially if not allowed to make the changes.

No 11 Brunswick Street Hotel and Brasserie

A hotel has lost its battle to alter the inside of an A-listed building in Edinburgh despite saying that they could be hurt financially if the appeal was not granted.

No11 Brunswick Street, which operates as a boutique hotel and restaurant, had appealed the decision by Edinburgh City Council to refuse permission for them to transform their guest lounge into an en-suite bedroom.

In a statement from the owners to the Scottish Government reporter, director Hamish Grant said the increasing number of hotel beds in Edinburgh meant rates for rooms had plateaued or even started to fall.

Labelling the original decision by the council as “manifestly unfair and unreasonable”, Mr Grant warned the council the hotel could be returned back to the residential market if new revenue streams were not found.

Since the appeal, Mr Grant said the hotel has secured the means to expand and that the future financial risk has been “removed”.

In a statement to the government reporter, he wrote: “No11 has been able to increase room revenue over the period up to 2018. However, the increasing number of beds by Hotel Chain developers in central Edinburgh has now tipped the capacity/room rate balance such that average rooms rates in 2019 and 2020 have started to be flat or fall. These additional rooms have all been approved by the City Council.

“In 2019 No11 generated £20,000 free cash flow after all costs. With a forward view of increasing underlying costs and stagnant or declining room revenue the business needs urgently to develop another revenue stream.

“The addition of one room will generate a contribution of around £35,000 a year after all costs. Without this, it is probable that the business will enter administration at some stage in the next 3 years as costs outstrip revenues.

“At this point the building will be sold for residential purposes and Edinburgh City Council rate income will fall from around £27,000 a year to around £3,000 a year.

“The owners of No11 have treated the historic building with sympathy when they redeveloped in 2012. The proposed bathroom is designed to be removable and not to interfere with the principle historic features of the room, and the room conversion is imperative for the business to continue, and for it to continue to be able to pay its business rate.

“It feels manifestly unfair and unreasonable of the Council to increase our costs (via rates), decrease our revenue (via approval of additional beds in Edinburgh) and then prevent us mitigating this by refusing to all out to modify one room.”

However, reporter Andrew Fleming said that despite the previous existence of an en-suite in the room, allowing it to be turned into a bedroom would be “harmful to the architectural character of the listed building”.

In the decision note, he wrote: “The proposals included some major interventions including comprehensive restoration of the hallway which improved the character of the building.

“The council was therefore justified in concluding, overall, that the alterations improved the character of the building.

“Given that the previous en-suite was removed but never replaced, I am presented with the current position where the room in question is as it was originally designed and I must make my assessment on that basis.”

Speaking to the Evening News, Mr Grant said that the hotel was categorically not going into administration despite the appeal failing and said the hotel will add new rooms in other ways which has removed the financial risk.

He said: “We were talking about the need to have extra revenue from the extra room to prevent future increases in minimum wages and rates crushing the business. We are not talking about an imminent threat.

“We have found an alternative means of adding extra rooms which has now removed the future risk.”