Too many hotel rooms lying empty as Airbnb soaks up tourist trade
IT is one of the world’s most popular tourist destinations, attracting more than four million visitors every year.
But Edinburgh now has a huge surplus of rooms to let – and hotel bosses admit the city’s hospitality industry is facing a crisis.
Experts say the over-supply is having a ‘negative impact’ on occupancy levels and room rates, with hotels unable to fill beds amid an explosion in short-term lets, such as those available through Airbnb.
The number of hotels in the capital has soared by almost 50 per cent in a decade, and a string of proposed new developments are either completed or awaiting planning permission.
The Edinburgh Hotels Association (EHA), which represents more than 50 city hotels, claims some businesses have been left in a ‘fragile’ state due to dwindling trade. It says the addition of more than 5,000 rooms over the past ten years is to blame for a slump that has left hotels unable to fill beds, even during peak periods such as the summer and winter festivals, and Six Nations Rugby weekends.
At least 2,400 hotel rooms are due to be created in Edinburgh over the next few years, while a similar number would also be built if proposed developments are approved by City of Edinburgh Council. EHA spokesman Russell Imrie said: ‘There is no doubt at all that the increase in hotel supply over recent years is now having a negative impact on hotel performance, especially in the low season.
‘Hotel supply in Edinburgh has expanded to accommodate peak demand but this means over-supply in the low seasons with the inevitable negative impact on occupancy and achieved rates. Even at periods of peak demand, the supply is now sufficient.’
He said hotels faced higher overhead costs and needed increasing financial performance ‘just to stand still’.
Mr Imrie added: ‘The growth in hotels combined with the explosion in short-term lets is
‘The supply is now sufficient’
making some accommodation businesses in the city fragile.’
Edinburgh was recently named as one of the world’s worst hotspots for ‘overtourism’.
The city has seen the number of overnight stays soar by almost a third in the space of seven years to 4.26million.
Depute council leader Cammy Day said it was ‘in all our interests’ to support prosperity from tourism, but the impacts of tourism ‘need to be fairer on residents’.
Heritage watchdog the Cockburn Association said: ‘This news of an oversupply of hotels will be frustrating to the many households trying to find affordable housing in the city, since sites that could have been used for housing were snapped up for hotels.’