TOURISTS and artists are being hit with hotel rates set at the "limits of tolerable" in Edinburgh during the festivals period, it has been warned.

Faith Liddell, director of Festivals Edinburgh, said soaring accommodation costs during August could potentially put the city's reputation at stake.

Research by hotel price comparison site trivago found that rates in Scotland's capital increased by 36 per cent to £196 during the Edinburgh Festival Fringe during August. It found an overnight stay cost an average of £196, up from £144 per night during July.

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Ms Liddell made the claim on the costs for those visiting the city during an evidence session on the economic importance of Edinburgh's festivals by Holyrood's economy committee.

Festivals Edinburgh, the organisation created by the directors of the city's 12 major festivals, has regularly raised concerns about the issue, she said. Ms Liddell said: "There is an issue about not interfering too much and allowing it to operate as a market. But we do need to think about the visitors as well and I know that it is definitely being talked about that it is at the limits of tolerable.

"The hoteliers are there to make a profit within the marketplace.

"We do feel we're at the stage where they need to look at it as well as a risk to all of us. The conversation we are raising is about city reputation, and that is in all our interests."

The city's festivals generate £261 million of economic impact for Scotland and 5,242 full time jobs in Edinburgh.

Tristan Nesbitt, general manager of the Sheraton Grand Hotel & Spa and chairman of the Edinburgh Hotels Association, said: "The city's hotels are passionate about delivering a world-class service to visitors and they play an incredibly important role in enhancing the experience of festival goers in to Edinburgh during this time.

"The majority of hotels across the city operate a demand-led pricing strategy with rooms during the festivals priced at similar rates to rooms during other high-demand periods in Edinburgh when hoteliers expect the city to be full."