Whitbread PLC has submitted a planning application to transform Capital House, a 1980s office building in central Edinburgh, into a 195-room Premier Inn hotel.

Project scope and investment details

The redevelopment involves converting the existing 65,350 sq ft building off Lothian Road, including a rear extension, into a new-format Premier Inn with an integrated ground-floor restaurant and bar. The total investment proposed exceeds £21 million.

Submitted to Edinburgh City Council on 2 May 2025, the application aims to deliver additional hotel capacity within Festival Square, adjacent to the Exchange District and in proximity to major transport links and tourist attractions.

Anticipated economic impact

According to Whitbread, the proposed Premier Inn is projected to host over 56,000 overnight guests annually. This is expected to generate approximately £8.1 million in external visitor spending per year, with around half anticipated to benefit local city centre businesses. The project is also forecasted to create over 30 new jobs in the hospitality sector.

“The visitor economy in Edinburgh is thriving but there remains an unmet demand for additional budget hotel rooms in the city. Capital House represents an excellent opportunity for us to deliver new Premier Inn bedrooms at affordable prices for our customers in a fantastic city centre location.” “The location is ideal for both business and leisure customers. It is sustainable and highly accessible with direct bus, tram and rail networks within a short walk... We are investing £21 million into delivering the new hotel which will generate over £8 million of additional guest spend into the Edinburgh economy each year and create more than 30 new hospitality jobs.” - Jill Anderson, Acquisitions Manager for Scotland at Whitbread

Context and strategic expansion

The proposed hotel would expand Whitbread’s existing footprint of 14 Premier Inn properties within the Edinburgh City Council area. The company reports that these hotels collectively accommodate nearly one million visitors annually and contribute an estimated £32 million in visitor-related spending to the local economy.

At the national level, Whitbread operates over 85,500 Premier Inn and hub by Premier Inn rooms across the UK and Ireland. The business continues to pursue its long-term expansion strategy, targeting a portfolio of 125,000 rooms across these two markets.