Edinburgh Hotel Capacity Surges as Visitor Numbers Decline and Tourist Tax Confirmed
- Harry Ness
- Dec 12, 2025
- 2 min read
A HVS report into Edinburgh's hotel market has revealed a boom in hotel capacity, with the number of rooms in Scotland's capital rising by 23% from 2014, reaching 19,000. Despite this, tourist numbers to Scotland's capital city have decreased by 1.5% year-on-year.
In January this year, The City of Edinburgh Council confirmed that it would be introducing a Visitor Levy (tourist tax), starting on the 24th of July 2026, with overnight accommodation such as Air BNBs and hotels having to pay a rate of 5% in taxation, which is expected to raise £50 million per year for the council.
This month the council confirmed its plan to construct 472 affordable homes, which has been funded by the new tourist tax, with the new-build developments set to be in Fountainbridge, Meadowbank and Coatfield Lane in Leith. This investment is set to be debated by councillors on the 26th of February next year as part of the wider budget meeting, and is subject to final approval.
Councillor Jane Meagher, the leader of City of Edinburgh Council, told BBC News earlier this month:
"Many of those working in our city's thriving visitor economy and cultural sectors are often unable to find affordable housing in the city, making it difficult for them to live close to where they work,"
"In addition, the council has declared a housing emergency, with more and more people presenting as homeless and not enough social homes available to meet this demand, and so too many residents have to use temporary accommodation, often in bed and breakfasts or hotels, taking vital capacity away from what should be tourist accommodation
The UK Government is working on delivering it's target of 1.5 million new homes by 2029, with planning reform being a key tool in addressing the housing crisis across the UK.
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