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.
Of the £305m worth of deals involving hotels in Scotland between January and September, £227m was in Edinburgh, 74.4% of the national total.
Among the hotel transactions in Edinburgh during 2025 has been the sale of the 244-room W hotel, known for its distinct ribbon-like design, which was acquired by investment firm Schroders Capital in reportedly one of the largest sales of recent years. Meanwhile, the boutique Bruntsfield Hotel was purchased by Dubai-based investor Dutco Group last December.
The research, undertaken by commercial property consultancy Knight Frank, found that hotels were the top-performing property sector in the Scottish capital, ahead of offices (£212m), retail (£121m), and industrials (£28m).
The news comes as revenue per available room (revpar) soared across hotels in Scotland and London during September, with revpar in Edinburgh rising by 8.5% year-on-year from £178.86 to £194.09.
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.”