Edinburgh hotel occupancy is down to 23% for August compared with 84% the same time last year, during what is normally one of the busiest months in the city's calendar.
This is according to STR data for the month when the city usually hosts its annual Fringe Festival, which has been cancelled this year due to Covid-19.
Neil Ellis, group operations director for Place Hotels and chair of the Edinburgh Hotels Association, which represents more than 50 of the city's major hotels, said Edinburgh is "in need of a huge programme of support from Scottish government" with Brits swapping city breaks for the countryside, and a slump in inbound tourism.
He said: "Hotels are very appreciative of the huge amounts of UK government support thus far but without there being a fully funded, resourced and supported city-wide organisation to spread the word globally, many more jobs will be lost, more businesses will close and visitors will be lured elsewhere where the destination is given the status and support it deserves."
Edinburgh Council placed its destination marketing organisation Marketing Edinburgh into hibernation earlier this year, however the authority is set to launch a new marketing campaign to promote the city later this week.
Council leader Adam McVey said: "We are only just coming out of the other side of the Covid-19 emergency and the return to a new normal has to be gradual. It has been little over a fortnight since hotels, bars and restaurants could begin to welcome visitors again and we've seen more and more businesses reopen in that time, with many venues and tourist attractions are still putting their re-opening plans in place. Getting the timing right for marketing the city is crucial so that Edinburgh is better equipped to welcome residents and visitors alike back to venues, attractions and local business, in a way which is safe for everyone.
"I'm very conscious that this has been an unprecedented challenge for the industry, unlike anything we have faced before, and that hotels are keen to see guests return again. Until this time, we've been able to support businesses with millions of pounds of grants, flexible licensing for outdoor spaces and transport measures which make it safer and more enjoyable for people to travel around.
"Our long-term economic recovery must also focus on supporting Edinburgh's visitor and hospitality appeal to remain strong. Next steps for city marketing will be part of that plan."