HOTELS in Edinburgh have been warned their prices are unsustainable after it was revealed that room charges during Hogmanay had risen by as much as 345 per cent.

Ibis Hotels has been criticised after advertising rooms on New Year’s Eve from £400 upwards when a week earlier its basic price was just £90.

The huge popularity of the city and its winter festivals with tourists means Edinburgh’s hotels are now among the busiest and most expensive in Europe.

The average price of a stay in a city centre hotel with a three- to five-star rating on New Year’s night is now £260 – three times the rate of the quietest months.

It is even higher than the equivalent rooms in London on same night which would cost on average £195.

Edinburgh is second only to Amsterdam in a list of Europe’s most expensive destinations for overnight stays on December 31.

At the five-star Caledonian Hotel, the average rate across its 241 rooms on Hogmanay was £428.

Councillor Gavin Barrie, the city’s economic convener, warned operators could not expect to carry on charging such high amounts as several new hotels are built in the city.

He said: “£400 appears to me to be a rather large amount, but it would be up to the hotelier to justify that price and up to the consumer to pay it.

“I think the hoteliers will pay the price and the public will find other places to stay.

“People will get smarter and they [the hoteliers] may reap what they sow later.

“At the end of the day, hotels are being built in Edinburgh and there are more planned. It’s a supply and demand thing that they can’t maintain these high rates across the city.”

The huge number of tourists visiting Edinburgh – and the higher rates that many of them are paying – has fuelled calls for a so-called tourist or bedroom tax.

City leaders believe that adding a modest charge to hotel bills could raise around £15 million a year at a time when public services are struggling to maintain standards.

The hotel industry says that such a tax would be highly damaging to one of the city’s biggest employers.

Just after Hogmanay, Ibis South Bridge have been offering rooms starting at £100, with prices dropping to as low as £40 by the end of the first week in January.

A spokesman for Accor Hotels, which owns the Ibis chain, said: “Room prices for New Year’s Eve at the ibis Edinburgh Centre South Bridge started at £155, reflecting excellent value for money, especially for those booking well ahead and direct on the ibis website which offers a best price guarantee for its rooms. It is an extremely popular and well-reviewed hotel, rated 4/5 by guests on TripAdvisor, and the average room rate across New Year’s Eve was £249 representing good value for one of Edinburgh’s busiest dates.

“Hotel room prices always vary depending on supply and demand and we constantly monitor our rates to ensure they remain competitive on any given night. Naturally at New Year, many have planned and booked ahead so in the last few days before the big night, demand for quality hotels in premium locations is exceptionally high."