Multi-Million Pound Refurb for Caledonian

ONE of Scotland’s leading hotels has submitted plans for an ambitious £20 million refurbishment.

The five-star Caledonian, on Edinburgh’s famous Princes Street, has submitted plans that include converting the disused triangular central courtyard to a covered guest lobby area, extending the ground floor restaurant and upgrading the hotel`s facilities.

It will be the second time in seven years that the hotel has undergone a multi-million pound refurbishment.

Hilton International bought and upgraded the hotel in 2000 before selling it to current owners, the HBoS-backed Caledonian Operating Company, for £51.7m in August last year – but Hilton retained the management contract.

Although Edinburgh hotel chiefs and the city’s Chamber of Commerce have welcomed the plans, the huge investment flies of the face of recent warnings of a downturn in the hotel industry.

Deloitte predicts that the expected consumer spending crunch, coupled with decreasing oil company presence in the North Sea and the resulting drop in demand for Scottish hotels, will have a negative impact on the country`s hospitality industry.

Despite these warnings, in what some are calling ill-advised plans, the Scottish Tourism Minister Jim Mather has set a target for 50 per cent growth in tourism over the next seven years, and Hilton has confidence in 2008.

“Sure there’s talk of 2008 being a tougher year," said John Rogers, operational vice president for the North region at Hilton.

"However we, along with our owners, take a very long term view with investment in and development of our hotels."

“In 2007 more than £4 million was invested in Hilton`s 11 Scottish hotels, and in 2008, in addition to the Caledonian Hilton, we have plans to invest a similar amount across the estate.”

The Caledonian specifically is set to receive £22 million to safeguard its position as a world-class luxury hotel.

The investment, which comes from new owners, The Caledonian Operating Company Ltd, will take effect from mid-January and will continue over the next three years.