Edinburgh grabs hotel top spot thanks to summer festivals, gigs and Six Nations
“The demand for hotel accommodation has been very high and supply remains relatively constrained” – Euan Kelly, Knight Frank
Edinburgh’s growing reputation as a global tourism hotspot has seen it take nearly three-quarters of the investment made in Scottish hotels this year, new research reveals.
Commercial property consultancy Knight Frank’s analysis of Real Capital Analytics data found that of the £305 million of investment deals involving hotels in Scotland between January and September, some £227m centred on the capital - 74.4 per cent of the national total.
Among the key transactions in Edinburgh during 2025 has been the sale of the distinctive W hotel, dubbed the “walnut whip”, which was acquired by Schroders Capital, marking one of the largest sales of recent years. The Bruntsfield Hotel was purchased by Dubai-based investor Dutco Group earlier in the year.
Hotels were the top-performing property sector in the city, ahead of offices (£212m), retail (£121m), and industrials (£28m), according to Knight Frank. It is only the second time this has happened in the first nine months of any year since the pandemic, adding to the £246m during the same period of 2024.
Official figures show that Edinburgh attracted more than five million international and domestic visitors last year. As a result, many hotels have seen occupancy rates hit new highs.
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Euan Kelly, capital markets partner at Knight Frank Edinburgh, 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. Those market dynamics mean investor demand for hotels in Edinburgh should remain strong.”
The firm’s research came as it emerged that Edinburgh had remained the most attractive UK city outside of London for hotel investment for a fifth consecutive year.
Deloitte’s latest hotel industry and investment survey saw the Scottish capital ranked most attractive by more than half (54 per cent) of respondents, followed by Cambridge, up two places from last year. Oxford and Manchester took third and fourth places respectively.
Leila Jiwnani, head of hospitality advisory at Deloitte UK, said: “London has secured its position as the most desirable hotel investment destination for a third year running, carving out its reputation as a dynamic capital city for business and leisure travel.
“Edinburgh also continues to demonstrate its popularity as a tourism hotspot, while destinations across Europe see varying levels of interest. Investors will be looking for locations that attract a variety of visitors, particularly amidst changing consumer preferences, including a focus on either value or luxury.”
Some three quarters (74 per cent) of respondents to the Deloitte survey of executives and investors from the hotel industry anticipate the level of competition for hotel acquisitions to increase in 2026.
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