EDINBURGH’S growing popularity as a tourist destination has seen it take nearly 75% of the investment made in Scottish hotels during the first three quarters of 2025, according to new research from Knight Frank.
The independent commercial property consultancy’s analysis of Real Capital Analytics (RCA) data found that of the £305 million of deals involving hotels in Scotland between January and September £227 million was in Edinburgh – 74.4% of the national total.
Among the hotel transactions in Edinburgh during 2025 has been the sale of the W hotel, which was acquired by Schroders Capital, one of the largest sales of recent years. The Bruntsfield Hotel was also purchased by Dubai-based investor Dutco Group earlier in the year.
Hotels were the top-performing property sector in the Scottish capital, ahead of offices (£212 million), retail (£121 million), and industrials (£28 million). It is only the second time this has happened in the first nine months of any year since the pandemic, adding to the £246 million 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, hotel occupancy rates have reportedly been at exceptional levels.
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 sale of the W hotel earlier this year has been a significant boost to the statistics, but with more stock likely to become available as it comes on stream and the city’s visitor numbers stronger than ever, we are likely to see more deals in the remainder of 2025 and into next year.”
