But now a radical rethink is being proposed for Princes Street in Edinburgh to ensure it remains thriving in the face of growing competition for its shops and the slump affecting the retail sector.

Business chiefs in the capital want to see it “redefined” by becoming home to new luxury hotels and department stores, high-tech office developments and visitor attractions in future years. READ MORE: Leader: Princes Street revamp could be making of the capital

They are also advocating parts of Princes Street being returned to its original use by encouraging the development of upmarket flats and apartments along the thoroughfare.

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Business chiefs foresee homes returning to the thoroughfare along with high-tech offices and tourist attractions as an answer to the retail crisis. Picture: Greg Macvean

Roddy Smith, chief executive of the business group Essential Edinburgh, called on the city to capitalise on the growth in its tourism sector in recent years and soaring demand for top-quality office space in the city centre.

He said “a serious strategic look” at Princes Street was needed because of the “undoubted” impact the opening of the new Edinburgh St James retail development nearby would have on the thoroughfare when it opens in 2020.

He suggested an overhaul of Princes Street could help ease pressure on the Old Town from the tourism industry and encourage more events to be held on and around George Street.

Smith cited new Gleneagles and Malmaison hotel developments on St Andrew Square and Diageo’s plans to create a visitor centre dedicated to Johnnie Walker whisky as examples of major developments being fuelled by the city’s tourism boom.

Speaking ahead of hosting Edinburgh’s annual tourism summit on Thursday, Smith said: “One of the biggest issues for the city is how we develop Princes Street. Everywhere around Princes Street is getting investment and redevelopment at the moment.

“You only have to look at what is happening on St Andrew Square, the new St James development, the proposals for Waverley Mall and the plans for the Johnnie Walker development at the old Fraser’s site. Space is at a premium in the city. We have to accept that the city needs to evolve to continue to be a world-class tourism destination.

“Princes Street will have to evolve and respond to the changing needs of the city, around growing tourism, demand for new top-end office space and how the retail sector is changing and developing.

“How it defines itself will be driven by economics. We currently have a shortage of grade-A office space in the city.

“There is strong evidence companies want to move back into the city centre, but they want high-quality open-plan high-tech office space rather than Georgian townhouses.

“At the moment we have a growing supply of mid-level hotel accommodation but we are still lacking top-end hotels. One of the biggest barriers to attracting conferences to the city is the lack of hotels at the five-star plus level.”

Princes Street dates back to 1767 when James Craig’s original plan for the New Town was published. In stark contrast to today, it started as a residential street, with the first inhabitants moving in during the 1770s, before it became gradually commercialised in the late 18th and early 19th centuries.

Smith added: “I don’t see why we can’t turn the upper floors of Princes Street into residential space.

“This is about potentially looking at a mix of top-end hotel, retail and office development. There needs to be a serious strategic look at Princes Street and an assessment of the current planning conditions.

“Princes Street is an attractive proposition because of its location and preeminence, and its bus and tram connections.

“It’s the main shopping street and I think it always will be, but I think there is a real opportunity for it to evolve.”