Whitbread has been granted planning permission to convert Capital House on Festival Square in central Edinburgh into a 195-bedroom Premier Inn.
The City of Edinburgh Council has approved the change of use for the vacant 65,350 sq ft office building, enabling Whitbread to proceed with a £21m conversion and rear extension. The hotel will be built to the group’s latest format and will include a ground-floor restaurant and bar.
Whitbread said the project is expected to support wider visitor spending once the hotel reaches maturity.
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An economic impact assessment commissioned by the company estimated that more than 56,000 guests a year could generate around £8.1m in annual external expenditure, with roughly half anticipated to go to city-centre businesses.
Whitbread bought the freehold of Capital House in late 2024 and submitted its planning application in May 2025.
The group is also pursuing further expansion in the city, including additional capacity at Edinburgh Airport and a fourth Hub by Premier Inn to the east of the centre.
Premier Inn operates 85,500 rooms across more than 840 hotels in the UK and Ireland. Whitbread has previously set out its belief in the long-term potential for a 125,000-room portfolio across the two countries.
An independent economic impact assessment for the development was carried out by Turley Economics, drawing on Whitbread’s commercial data and a 2024 national study of Premier Inn’s economic footprint.
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.”
Anderson added: “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 1980’s 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.”
