THE biggest hotel in Edinburgh is set to be leased in a bid to help support a council-owned conference centre tally up more income
The Edinburgh International Conference Centre (EICC) wants to take on a 365-bedroom hotel as part of a proposed development at a gap site near Haymarket station, which has remained empty for more than 50 years.
The venture will also include a catering college, thought to be the first of its kind in the UK - in a partnership with Edinburhg College.
Councillors will make a final decision on sub-leasing the building on March 12 - despite concerns by some that the impact of tourism should be curbed.
The EICC needs a way of generating more income, with a council insider warning that the hotel “will be their main income stream” while “conferencing will be reduced to a sideline”.
A hotel industry source suggested the council venture could have an impact on the private sector.
They said: “The council getting behind what will be the biggest hotel in the city is not particularly helpful to other hotel operators.
“I understand the challenges the EICC is faced with, but the hotel industry is finding things difficult too and its likely to get worse with Brexit.”
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The council, which owns the EICC as an arms-length company, has been asked to intervene amid a warning from the conference centre that a funding gap will need to be plugged in the coming years.
A report to be considered by the City of Edinburgh Council’s finance and resources committee on Thursday, will ask for politicians to endorse leasing the hotel and sub-leasing the venture to the EICC, who will “operate the hotel under a franchise agreement with an international hotel brand”.
Council officials say that “the profits from the hotel will be used to fund the required capital investment in the conference centre” while the authority “will not take on any risk associated with the construction of the hotel”.
The conference centre estimates that up to the end of 2038, “significant capital expenditure” will be needed but that the company’s “surpluses are not forecast to be sufficient to meet this expenditure”.
In the spring of 2019, Quartermile Developments Limited, which is developing the Haymarket gap site, approached the council with the leaseholder option.
A source close to the EICC said the catering school would help “alleviate a skills shortage in the industry” and would be “pioneering” for the UK.
The EICC has had to turn away events of up to 1,000 people due to their being no suitable accommodation for delegates to use.
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If approved, the majority of the 365 bedrooms would cater for business tourism.
Council finance spokesperson Alasdair Rankin said: “It’s clear that this project could offer significant employment and training opportunities for local people, as well as forming an important part of the overall regeneration of the Haymarket gap site and helping to ensure the continued success of the EICC going forward, with no expected call on council budgets.
“A final decision on whether or not to proceed with this will be made by all councillors on 12 March.”
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