Plans to transform a historic Georgian building into a luxury Dundee hotel have been scrapped after its owners suggested the market has become saturated.
177-year-old Custom House has been put up for sale by the Apex, which bought the A-listed former headquarters of the Dundee Port Authority in 2014.
The hotel chain had previously said it planned to open a five-star offering which would complement its existing accommodation a stone’s throw away.
However, the investment stalled in April 2017 after the nearby Foxlake watersports centre was approved by planners.
The Apex had a long-standing objection to the wakeboarding centre, claiming it would detract from views and remove vital parking provision.
The hotel’s manager said at the time the plans had been put on hold until the impact of the centre had been determined.
A number of new hotels have since opened, including Sleeperz at Dundee train station and Hotel Indigo at Blackscroft.
Malmaison and Hampton by Hilton also opened in 2014 and early 2017 respectively.
The surge was sparked by excitement surrounding the £80.1 million V&A Dundee which opened in September 2018.
A spokesperson for Apex City Quay Hotel & Spa said: “Having carried out a full market assessment that looked into the future plans of Custom House and considered various options, we have taken the decision to sell the property.
“With the number of hotels increasing within the area and having already invested heavily in our Dundee property with a £2.4 million upgrade, now is not the time to develop Custom House and bring more accommodation to the market.
“We will continue to invest significantly in Apex City Quay Hotel & Spa, with a £1 million programme of works to refurbish our front of house getting under way in the coming weeks.”
When asked about the Apex’s insinuation that there is no market in the city for more hotels, VisitScotland’s regional leadership director Caroline Warburton, said: “The success of the V&A Dundee since its launch last year has undoubtedly drawn many more visitors to the city.
“In the lead-up to the opening, there was also significant investment in the hotel sector, something that was needed in the city.
“Combined with our other visitor attractions, including Discovery Point, the McManus Gallery and Verdant Works – as well as great parks, shops and places to eat and drink – the city has a great buzz about it.
“This has resulted in both an increase in the number of beds and the range of experiences on offer to overnight visitors.
“There is the opportunity to increase occupancy levels in the city and VisitScotland is working closely with tourism partners to help raise the profile of Dundee as a quality destination.”