Can the Scottish capital sustain a design-led hotel when companies are forcing travellers to downgrade Opening a new lifestyle hotel charging up to £550 a night in a regional UK city in the teeth of recession and slump in business travel is either a very brave or very foolhardy move. Scandinavian hotels group Rezidor is clearly hoping it will be the former when it officially opens the Hotel Missoni in Edinburgh on 8 June, the first of its new design-led lifestyle hotel brand located on a prime site close to Edinburgh Castle on the famous Royal Mile. The 136-room hotel, themed by Italian fashion house guru Rosita Missoni (who likes lots of bright colours), probably seemed a good idea when first mooted by Rezidor in 2005, when demand for lifestyle hotels seemed unstoppable. But now it does not look so clever as many business travellers are forced to search out the cheapest rates and eschew designer frippery. Already there have been casualties. The 35-room luxury lifestyle Ellington Hotel in Leeds, which was opened by a group of former Rocco Forte Hotels executives only last Autumn and included a restaurant overseen by Albert Roux, closed earlier this year after its backers fell victim to the collapse in commercial property prices. According to Jonathan Langston, managing director of TRI Hospitality Consulting, the “current downturn and limited access to debt may mean some plans for high-end lifestyle hotels are cancelled or postponed.” But given the long-lead times involved, most of the major hotel chains are still pressing ahead with a wave of new lifestyle hotels planned when times were good, in the expectation the economy will have recovered when they finally come on stream. Starwood, for example, is due to open its first iconic W hotels in the UK next year – at London’s Leicester Square and in Manchester’s warehouse district - with a W due to open in Barcelona later this year. InterContinental Hotels Group is set to add three more of its Hotel Indigo lifestyle hotels in London by 2012 to add to the Indigo opened in Paddington earlier this year. Marriott is also launching next year (so far only in the US) a new lifestyle hotel concept called Edition, created in conjunction with veteran hotelier Ian Schrager, one of the early innovators of the designer hotel concept. Hilton, however, was lagging behind in the race for a lifestyle brand of its own until last March when it launched, amid much fanfare, its Denizen concept. But it was soon forced to suspend development after Starwood took legal action, claiming that some former employees had stolen confidential details of its W brand to help Hilton develop Denizen. But will lifestyle hotels still appeal to business travellers post-recession? The attraction of these hotels has traditionally been to the younger generation of ‘road warriors’, the Generation X who rejected identikit hotel chains with their bland design in favour of more style. Lifestyle hotels tend to be well-designed and embrace the latest technology, often run by young and enthusiastic management teams, and based around a high-quality restaurant concept. Malmaison hotels, founded by Scottish hotelier Ken McCulloch in the mid 1990s, typified this approach. Yet do they offer value for money? Hotel Missoni’s cheapest rooms this month start at £180 a night, including extras such as fast internet access and two items of laundry free, but not breakfast (about £15 extra). Rates for larger rooms (the basic is 28 square metres) go up to £550 a night including VAT, but all room rates can vary according to demand. Such prices are at the higher end of the range for Edinburgh - cheapest room mid-week in mid-June at another Edinburgh lifestyle hotel, Tigerlily (‘one of the 65 coolest hotels in the world’ according to Condé Nast Traveller), is £150 a night with breakfast. The Edinburgh Malmaison rate is £160 for mid-June. Regular business hotels without the dedicated designer name are also less expensive. The new four-star Apex Waterloo Place Hotel in Edinburgh, which opened in March in Princes Street, has mid-week rooms in June at £135 night, with full Scottish breakfast £10 extra. Missoni does have some special opening promotional rates on offer via telephone (0131 220 6666) rather than online, with 20% off some room rates on certain days in June for bookings of two more nights, subject to availability. But Rezidor, whose other hotel brands include Radisson Blu and Park Hotels, may have been lucky after all with its choice of Edinburgh for its first Missoni hotel (another Missoni is due to open in Kuwait later this year). Latest hotel occupancy figures for April from hotel industry consultants PKF show that while UK regional hotels saw occupancy fall by an average of 13.6% in April, Edinburgh experienced a 6% increase in the month which “shows the underlying strength of Edinburgh as a business and leisure destination”, says PKF. But elsewhere in London and around the country the story may not so rosy. Pressure on rates in the downturn is one factor; but more significant is whether the next generation of business travellers will, come next year, still find design-led hotels so appealing in a post-recession corporate world.