We know it's ugly, but it's just the place for your hotel

And it seems Councillor Tom Buchanan, the city's economic development leader, has just the right location in mind for a luxury hotel.

Cllr Buchanan is pushing one of the city's "ugliest" buildings – Argyle House at West Port – as the ideal location for any new luxury hotel development.

The American company, which runs hundreds of hotels and luxury resorts around the world, has already held talks with city council chiefs about finding a location.

Bosses at the firm have said that the Capital is the location most searched for on its website where they don't already have a hotel.

Cllr Buchanan said: "Companies like the Hyatt chain and others are looking at Edinburgh because of its historical significance and because it is the type of city people try to book where they don't have a hotel.

"In Hyatt's case, they say that the number one city that they are asked for where they don't have a hotel brand is Edinburgh. As well as the hotel brands, we also pitch to the developers and tell them of the opportunities we have for hotel brands."

Among the locations being promoted to Hyatt and others is the West Port/King's Stables Road site, where the council is the majority owner.

However, the council is still trying to convince the private owner of the "eyesore" Argyle House, Fordgate Property, to consider redevelopment.

Cllr Buchanan said: "The second ugliest building in Edinburgh is Argyle House at West Port. We own assets at King's Stables Road and we could work with a developer to create something spectacular on that site.

"It would provide another aspect of the Castle that people wouldn't see otherwise, like at the Point Hotel."

Hyatt is just the latest brand that staff from the city council's economic development department are helping to find sites, and follows interest from the renowned Jumeirah brand earlier this year.

It is not yet known which brand the Chicago-based company wants to bring to the city.

Brands it operates include the luxury Park Hyatt, Grand Hyatt and Hyatt Regency, as well as the boutique-style Andaz.

Hyatt has been operating for more than 50 years and among its landmarks hotels is the Hyatt Regency Dallas, which featured on the opening credits of the famous soap opera Dallas, and Shanghai's Park Hyatt, thought to be the highest hotel in the world.

Stewart Taylor, director of business space at property firm CB Richard Ellis, said that a number of hotel brands are keen to move to Edinburgh – although most don't want to develop and own the building themselves, so they need to rely on developers pressing ahead with suitable developments for them to occupy.

"There is certainly interest in the city from hoteliers, particularly on leasehold or management contract basis," he said.

"But while the demand is there, they are struggling to identify the right opportunities."

Nobody at Hyatt was available to comment on its Edinburgh plans.