Edinburgh council set to sign £91 million lease for new EICC hotel
Council chiefs are set to sign a £91 million lease for a controversial hotel project at Haymarket for the Edinburgh International Conference Centre.
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The 365-bedroom, four-star hotel will allow the EICC to offer conference organisers guaranteed hotel rooms within a few hundred yards of the conference centre.
And the project also includes a pioneering hotel school aimed at training much-needed recruits to the industry.
The council is to take a 25-year lease on the new property and sub-lease it to the EICC. An official notice on the Public Contracts Scotland website puts the total value of the lease over the 25-year term at £91.25 million.
Building work is being carried out by developers Quartermile for the Prudential Assurance Co Ltd.
The council says the construction cost of the hotel is being met by the developer and funder and the council will not take on any risk associated with construction.
Once completed to the agreed specification, the council will take the lease on the building, with the rental to be met from income generated by the hotel, meaning there is no cost to the council.
Profits from the hotel will be used to fund ongoing capital investment needed to keep the EICC up to date.
But there have been questions from within the council about the project, with claims last year that it could turn out to be a “white elephant” if the Covid pandemic has a long-term effect on business tourism.
Green councillor Gavin Corbett said: "Green councillors have consistently opposed betting the council's finances on a new hotel at Haymarket.
"Almost two years ago I challenged why the council was giving itself skin in the game for a business model which relies on encouraging thousands of people to fly across the world to attend events for a few days.
"Now here we are two months away from the COP26 climate conference which demands that business as usual is dramatically shifted and that includes international business tourism. We've also had a world-wide pandemic which has shown that global connections can still be maintained without crisis-crossing the oceans by plane.
"So if councillors are serious about the climate emergency and serious about learning the lessons of the pandemic this hotel project will be shelved as out of date before it even opens."
And although the Tories have backed the hotel plan, Tory finance spokesman Andrew Johnston said: "The hotel and training school were approved pre-Covid and had ambitious targets for generating economic growth in the Capital.
"This high-value project can still be a success but given the current Scottish Government's less than supportive approach towards the industry and the fact that the council leader still wants to tax tourists for visiting, assurances are required that value for money can still be achieved.”
The EICC decided it should open a hotel because it estimates it loses as much a £1 million a year in conference business because existing hotels are not willing to allow block booking of rooms more than 12 months ahead, as conference organisers require.
The new hotel is expected to create more than 200 jobs and will have rooms available for tourists and business travellers as well as conference delegates.
The hotel school will be run in partnership with Edinburgh College and is eventually expected to be training up to 200 people per year, with the recruits ranging from school leavers to retired people and including hard-to-reach groups.
A council spokesperson said: “The final business case for a new EICC hotel and hotel school will be considered by councillors in October, having been agreed in principle last year.
“If approved, the project would offer significant employment and training opportunities for local people. It would also help ensure the long-term continued success of the EICC, while enhancing the ongoing regeneration of the Haymarket area – all with no expected call on council budgets.
EICC chief executive Marshall Dallas said: "All the parties involved in the hotel and hotel school, which is set to open in 2024, believe that the business case remains robust.
"The school, which has always been at the heart of the initiative, will enable world-class skills to be passed on to future generations, while the overall offering will be vital to both the EICC and Scotland in general as we look forward to a rebound in business tourism to the city and the country."