Penarth Town Council has suggested Holm House Hotel remains on the market for longer to prevent loss of existing tourism.
Plans to convert the former luxury hotel and spa into a single dwelling were submitted last month.
The former hotel and restaurant hosted famous stars, including David Hasselhoff and singer Harry Style.
It opened in 2004 and the building dates back to the 1920s when it was built as a home.
A planning document stated there had been no viable offers to purchase the Holm House for it to be run as a hotel since it closed.
It was published on behalf of the developers, SC Design Build Ltd, who were converting the former hotel.
The former hotel has been on the market for around four months, but Penarth Town Council suggest a marketing period of 12 months.
In a comment on the application, received on August 28, Penarth Town Council stated:
“The LDP (Local Development Plan) seeks to enhance tourism and leisure facilities and resist proposals which would result in their loss.
“Where a proposal involves the loss of an existing tourism or leisure facility, the tourism and development SPG (supplementary page guidance) recommends a marketing period of 12 months.
“The viability assessment also focuses on the negligible loss of hotel capacity in the greater Cardiff market generally with less emphasis on the impact on the Penarth leisure offer specifically.
“We suggest the applicants follow the SPG Guidance as there is not a sufficient time period to demonstrate that there is not a demand for the hotel use.”
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What happened to Holm House Hotel?
The general manager Dan Jones announced with a ‘heavy heart’ the hotel would permanently close in a social media post, on January 31, 2024.
“Following two decades of trading we have tried our best to navigate through the post-Covid era, only to be hit by another storm, the cost-of-living crisis.
“The business has not been profitable since the pandemic, and we ultimately support the owner's decision,” wrote Mr Jones.
In the post, Mr Jones confirmed the hotel would continue to operate for lunch, dinner, afternoon tea, a spa treatment or overnight stay until February or March.
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