Former Festival Square office to be converted into 195-bedroom Premier Inn

Whitbread will invest £21 million in the conversion and rear extension of the 65,350 sq ft vacant office building into a latest format Premier Inn hotel with a ground floor restaurant and bar.   

The new Premier Inn is anticipated to generate an additional £8.1m per year in visitor expenditure through the external spending of more than 56,000 business and leisure guests who are predicted to stay at the hotel every year once it reaches maturity. 

Whitbread believes half of this external year-round expenditure is anticipated to be spent supporting city centre businesses based on a comprehensive nationwide study of its customers in 2023.  

Jill Anderson, acquisitions manager for Scotland at Whitbread, said: “We are fortunate to have an established network of 14 trading Premier Inn hotels in Edinburgh which welcome a million visitors a year and drive £32m in annual external spending in the city. 

“The strong year-round demand we are continuing to experience for our rooms in the city is driving the expansion of Premier Inn across Edinburgh, including at Capital House in the heart of the city centre. 

“It is a sensational location for a budget hotel given its proximity to iconic tourist destinations like Edinburgh Castle, a host of theatres and concert venues, the Edinburgh International Conference Centre (EICC) and the Exchange District.  

“Getting the green light to convert the 1980s office into a latest format Premier Inn is a huge achievement for the team and we will waste no time in breathing fresh life into the empty building and adding another high-quality location for our customers in Scotland.”

Whitbread acquired Edinburgh Capital House freehold in late 2024 and submitted a planning application to change the use of the 1980s office block to a hotel in May 2025.