Heritage expert points to hotel 'salvation' of famous street

The Herald Scotland

08-05-2025

Is the historic core, a World Heritage Site, to become a holiday resort? What kind of development brings best returns to international investors, and should that decide what gets built where and for whom? Whose centre is it?
The 2008 financial crisis, with the collapse of the Royal Bank of Scotland and HBOS, sent shivers through the Edinburgh administration.
The result was a pre-Covid decade in which the city council, further incentivised by austerity, worked closely with Scottish Government agencies to monetise assets, particularly in the city centre, where the unique historic environment and sense of place offered exceptional investment opportunities.
Being 'open for business' reached its apotheosis in 2019 when a huge space deck for the Christmas market was allowed to be erected in East Princes Street without planning permission. The Cockburn Association, the city's civic trust, led public concern, expressed in the theme of a huge public meeting in January 2020, 'City for Sale'.
The most significant development since then was the opening in 2021 of the St James Quarter behind the east end of Princes Street. It is a private space where the public are invited as 'guests'. It exemplifies what happens when global investors control space and promulgate the narrative about the heart of a city.
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Back in 2007, the city council identified the need for a 'main flagship covered shopping centre' to 'maintain an intensely developed vibrant city centre character'. Stalled by the 2008 crash and then by Covid, the St James Quarter with its galleria and 850,000 square feet of new prime retail space, was a welcome replacement for the despised 1970s St James Centre – a glum mall. In their marketing hyperbole, it is a 'lifestyle destination'. The Quarter's website proclaims pride in developing 'a fully inclusive community', while boasting 'exclusive new stores, restaurants, bars, entertainment, and more'.
The W Hotel with its 'bundle of coiled ribbons, culminating in a pennant flying in the Edinburgh breeze', is part of this development. It now commands Edinburgh's historic skyline with Trump-like swagger.
The decline of Princes Street is a recurrent theme in Edinburgh chatter: trams, traffic and tartanry have all been bemoaned across the decades. However, the impact of the St James Quarter on what was the prime shopping street, was brutal. The developer, Nuveen, claims 'foresight' as one of its strengths, so presumably knew its £1 billion investment to generate rental income for pensioners in North America would create vacancies on Princes Street and drive it downmarket.
Conventional department stores are making way for mixed retail and hotel offerings. (Image: Getty Images) Salvation of sorts for Princes Street has come from the buoyant hotel industry. Profit margins on hotels have been over 20%, with Deloitte ranking Edinburgh ninth in Europe as a place for hotel investment. Therefore, hotels are filling vacant office buildings and some of the gaps on Princes Street, often with the promise of ground floor cafés and restaurants.
More are in the pipeline across the city centre, from Haymarket to St Andrew's Square. But, as the Cockburn Association has argued: 'Without robust intervention, Princes Street risks transforming into a corridor of mid-market hotels, global fast-food chains, and uninspired retail, with diminished upper-floor activity.'
The profitability of hotels has been boosted by the city's tourism, culture and events-led economic strategy. The historic environment and the qualities of the city centre as a place have been key assets to exploit. Festivalisation has seen not just a growth in the scale and number of festivals staged, but also an intensification, during the Fringe in particular, in the concentration of events in the Old Town.
This cultural agglomeration effect has infused the economic and social ecosystem of the city centre, a finite space physically constrained by the historical legacy of its streets and buildings. While cities such as Manchester have repopulated their centres, Edinburgh's traditional mixed resident community in the centre has been hollowed by short-term lets, a fate shared by other attractive historic cities.
A successful judicial review by the short-term let industry thwarted council plans to use planning and licensing powers to reclaim for permanent residence the thousands of homes lost to that industry.
Similarly, purpose-built student accommodation has gobbled up scarce city centre sites, as well as land around the fringes of the centre. This form of development is not required to contribute affordable housing. In the office sector, prime rents were predicted (pre-Trump) to achieve a healthy increase by 2028, though demand for 1500 to 3000 square feet offices remains weak.
In summary, what we are seeing across the city centre is polarisation and contestation. Edinburgh is fortunate in being an attractive location for investors, but it comes with a price – loss of affordable housing and pressure to commercialise public space and accommodate an ever increasing number of visitors in a confined historic area, while austerity rots the quality of the public realm.
Civic campaigning against the commercialisation of public space, led by the Cockburn Association, saw the council row back on the takeover of Princes Street Gardens by the events industry.
The Summer Sessions gigs have migrated to Ingleston, restoring tranquillity and public access to the gardens in August. Plans for a big wheel fairground attraction from July to January were rejected but show what may yet come. Might a sandy beach alongside a recreated Nor' Loch in Princes St Gardens generate more tourist income?
The Cockburn Association is planning a civic workshop in the autumn to produce a medium-term vision for the city. Civic greenspace, heritage conservation and streetscape enhancement are essentials, but, above all, ways need to be found to replenish the stock of affordable housing.
Professor Cliff Hague is past chairman of the Cockburn Association, Scotland's oldest independent conservation charity