EasyHotel plans to jet into Capital

Now, however, the city's prime shopping thoroughfare is set for something different with plans announced for its first budget "no-frills" hotel.

Sir Stelios Haji-Ioannou's easyGroup empire is in "advanced" talks about creating its first Edinburgh easyHotel in a building that has been empty for over a decade.

The Edinburgh Rock Cafe closed in 1998 and ever since, the upper floors of 125a Princes Street have been gathering dust.

The easyGroup wants to create a hotel with up to 30 bedrooms in the building. The interest comes after Glasgow-based developer Parcotel bought the upper three floors for 500,000 and then set its sights on finding a tenant.

EasyHotel, which operates ten hotels worldwide, has been looking for sites in Edinburgh for several years and recently announced plans for a first Scottish hotel in Glasgow. The new hotel is set to become among Edinburgh's cheapest, with rooms likely to cost less than 25.

Calum Russell, easyHotel's commercial director, said: "easyHotel is in advanced talks with a potential franchisee about a site on Princes Street, which could, subject to approval, be easyHotel's first Edinburgh hotel."

The new hotel, which would require planning consent, would try to tap into interest among consumers for affordable rooms.

The rooms would feature space for little more than a double bed and guests staying more than one night would have to pay extra to have their room cleaned.

The new hotel would be a boost to the council's "string of pearls" plans for the rejuvenation of Princes Street. It is on the same block as Northern Irish developer Deramore's own plans for a hotel at 121-123 Princes Street.

Will Scarlett, director of land and development at property firm Rettie & Co, which acted for seller Aberdeen Property Investors in the deal that saw Parcotel take over ownership of the property, said: "It really is a unique site in terms of its position and views.

"Companies are now being encouraged by the planners' approach and we are now beginning to see more interest in realising the value of the upper floors."

The interest was welcomed by business leaders. Ron Hewitt, chief executive of the Edinburgh Chamber of Commerce, said: "EasyHotel's resolution to invest on Princes Street is fantastic news."