Edinburgh attracts 75% of Scotland’s hotel investment in 2025

Edinburgh accounted for nearly three quarters of all hotel investment in Scotland during the first nine months of 2025, according to new research from Knight Frank.

The property consultancy’s analysis of Real Capital Analytics (RCA) data shows that £227 million of the £305 million invested in Scottish hotels between January and September was directed at the capital, representing 74.4% of the total.

Notable transactions included the sale of the W Edinburgh to Schroders Capital, one of the largest hotel deals in recent years, and the acquisition of the Bruntsfield Hotel by Dubai-based Dutco Group earlier in the year.

Hotels were the top-performing property sector in Edinburgh, ahead of offices (£212 million), retail (£121 million), and industrials (£28 million). It is only the second time since the pandemic that hotels have led investment activity in the city during the first three quarters of the year, building on £246 million recorded over the same period in 2024.

Meanwhile, official tourism figures show Edinburgh welcomed more than five million domestic and international visitors last year, with hotel occupancy levels reported to be among the highest in the UK.

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.”