Festival crowds put pressure on the city (pic: Terry Murden)

Rising accommodation costs in Edinburgh were pushing artists and venues into financial hardship, according to the head of Edinburgh Festival Fringe.

Shona McCarthy, the chief executive of the Edinburgh Festival Fringe Society, told Westminster’s Scottish Affairs Committee that the surge in costs, together with new rules around short-term lets, required a “strategic approach”.

She described the rising costs as “my grim reaper at the moment, and I think we need an Olympic response.”

Ms McCarthy said while they were “very supportive of the short term lets legislation” – which involves new licences having to be awarded for properties rented out on a short term basis – she added it had “unintended consequences – particularly for artists”.

She said: “It is something that we need a strategic approach to address in a real way if we are to continue to host such a major event every year.”

She told MPs that both the Scottish and UK Governments could do more to help the festivals which contribute millions to the local economy but also cause disruption.

“Our marketing budgets are miniscule and yet we have these global reputations. There is an enormous amount the Scottish and UK Governments could do to promote the festivals overseas.”

Francesca Hegyi, the chief executive of the Edinburgh International Festival, told the committee this was the first year that financial help had been received from the UK Government.

She said: “In the last eight years, we have 90 different instances of foreign governments investing in us, but the same isn’t said for Scottish Government colleagues or our UK Government colleagues.”

Ms Hegyi told MPs: “If you think of the effort that goes into staging a Commonwealth Games or even Eurovision over the weekend, it is sort of taken for granted we will happen every single year.”

She conceded there was an “uncomfortable relationship” with residents and the local council and the impact that the festivals had on the city.

“We all need to get around the table and work out what is a sustainable future, including sustainable tourism for Edinburgh and for the festivals, because if we don’t, some of the festivals won’t be there in the next five years.”