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Edinburgh accounted for nearly 75% of investments made in Scottish hotels during the first three quarters of 2025, according to new analysis from Knight Frank. Knight Frank’s review of Real Capital Analytics data found that £227m of the £305m spent on hotel deals across Scotland between January and September was directed to the city, marking 74.4% of the national total.
The firm said the city’s high visitor numbers had continued to support investor interest, as more than five million domestic and international travellers visited Edinburgh last year, with hotel occupancy reported to be at “exceptional” levels.
Among the 2025 transactions was the sale of the W hotel to Schroders Capital, one of the largest hotel deals in recent years. Bruntsfield Hotel was also bought earlier in the year by Dubai-based investor Dutco Group.
Hotels were the best-performing property asset in Edinburgh in the period, ahead of offices at £212m, retail at £121m and industrials at £28m. It is only the second time since the pandemic that hotels have led the city’s property sectors during the first three quarters of a year, adding to the £246m during the same period of 2024.
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.”
He added: “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.”
