The Kings Stable Road site will form part of a larger development which will include one and two bedroom flats, student accommodation, an arts café complex and artisans’ workshops.
Developers said they were aiming for a ‘non cookie-cutter’ design that captured the history and character of the historic Grassmarket area.
“It is fair to say we have been inundated with enquiries and are in discussions with a number of operators, given the King’s Stables Road site is one of the last few prime pieces of hotel real estate within the City,” said Jeremy Collins of Jenics, hotel advisor to the developers.
“We are particularly aware of the sensitive nature of the site and its location as a UNESCO World Heritage Site. These aspects are of particular significance in our ongoing discussions with hoteliers and are clearly seen as beneficial features when it comes to marketing the location.”
Having lain vacant since 2009, the proposed redevelopment will be taken forward by a joint venture between Peveril Securities - the development arm of the Bowmer and Kirkland Group - and Campus Development Management.
Hotels in Edinburgh have seen strong growth this year, with both rising occupancy and Average Room Rates. Fifteen million additional foreign visitors are expected to arrive in the city over the next five years as a result of EasyJet and Air Canada's new flight routes.