Edinburgh’s growing value as a tourist destination saw it claim nearly three-quarters of the total cash investment made in Scottish hotels during the first three quarters of 2025.
According to new research from commercial property consultancy Knight Frank, of the £305 million worth of deals involving hotels in Scotland recorded between between January and September this year, £227 million was spent on Edinburgh property.
In fact, hotels were the top-performing property sector in the Scottish capital, ahead of offices at £212 million, retail at £121 million, and industrials at a mere £28 million.
This is only the second time this has happened in the first nine months of any year since the pandemic, adding to the £246 million Edinburgh hotels notched up during the same period of 2024.
A major factor bumping up 2025’s figures was the sale of the W Hotel, in the heart of the St James Quarter, which was acquired by Schroders Capital in what was reportedly one of the largest sales of recent years. Although the actual figure was never disclosed, it is accepted that the prestige hotel’s price-tag was well over £100 million.
The Bruntsfield Hotel was also purchased by Dubai-based investor Dutco Group earlier in the year.
Capital markets partner at Knight Frank Edinburgh, Euan Kelly, said: “Edinburgh continues to grow in popularity as a destination for both international and domestic visitors.
“The city is a year-round tourist destination – while the festivals are an obvious attraction in the summer, golf, the Six Nations, along with a growing number of conferences, concerts, and other events are all adding to what the city has to offer.
“With that, the demand for hotel accommodation has been very high and supply remains relatively constrained – although, the conversion of several city centre buildings to hotel and aparthotel use will add to the city’s stock over time.”
Official figures show that Edinburgh attracted more than five million international and domestic visitors last year, pushing hotel occupancy rates to ‘exceptional’ levels.
“Those market dynamics mean investor demand for hotels in Edinburgh should remain strong,” said Kelly.
