Frank Ross, the depute leader of Edinburgh City Council, initially said he couldn’t remember if he had informed officials that he bought the 11-bed property last October.
However last night he said he would be submitting fresh paperwork to confirm he owns most of a company that paid £160,000 for the Silverfjord Hotel in Kingussie.
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Under the Councillors’ Code of Conduct, Mr Ross, a trained accountant, should have declared the business under income, property and shareholdings on his council register.
He now faces an inquiry by the Standards Commission for Scotland, which has the power to suspend councillors, something which would be politically fatal for a council leader.
The SNP is hoping to replace Labour as the largest party in Edinburgh under Mr Ross.
Nicola Sturgeon is due to launch the SNP’s local election campaign in Edinburgh today with Mr Ross, who is also the city’s economy spokesman, in attendance.
Public records show Mr Ross and his family set up Silverfjord Kingussie Ltd in February 2015.
Mr Ross, his wife, and their son and daughter were the company’s directors, with Mr Ross owning 82 per cent of the shares, and the others owning 6 per cent each.
The company later acquired the Silverfjord Hotel with finance from RBS.
The hotel was marketed as having five en-suite letting bedrooms, three owner bedrooms and three staff bedrooms, plus a bar/diner for up to 35 people and function room for 40.
Mr Ross, who is standing for re-election in Corstorphine/Murrayfield, has been diligent in updating his register of interests in the past, recording directorships, hospitality and gifts.
He also declares a £350,000 second home in Newtonmore, nine miles from his hotel.
Asked about the hotel’s absence from his register, Mr Ross said initially: “It should be on the register. I’ll need to check that. As far as I was concerned, I’d registered it.
“If I’m being honest, I’ve never gone back and double-checked it’s been put in there.”
Pressed on whether he could remember declaring the hotel, he said: “If you want the honest truth, no. But I know I did it, because I always do it.”
Asked about a possible Standards Commission complaint, he said: “I suppose if somebody’s going to make a complaint, somebody’s going to make a complaint.
“The fact that it’s not recorded is a fact, and I need to address that now.”
He added he had created nine jobs by re-opening a business that had been closed for 18 months, and was a living wage employer.
Mr Ross recently made headlines by accusing Unionist parties of only calling themselves “Scottish” as a marketing exercise to win votes.
UK LibDem leader Tim Farron said the comment exposed “extremism” and “intolerance” within the SNP.
Labour MP Ian Murray said: “Frank Ross is turning into a complete liability for the SNP.
"It takes a special level of arrogance to think that you can run Scotland's capital while you are running a hotel in a completely different part of the country.
"Nicola Sturgeon needs to outline what steps she is going to take to discipline Mr Ross, or if he can stay the SNP's candidate to lead Edinburgh City Council.”
Mr Ross responded: “Ian’s entitled to his opinion."
A council spokesman said: “Cllr Ross has informed us that he is updating his Register of Interest and will be submitting the relevant paperwork.”
Mr Briggs said: "It is important this matter is investigated immediately as it will be of grave concern to those residents in Corstorphine and Murrayfield being asked to vote for Mr Ross again at the upcoming local election."