A LOSS-making Minehead hotel could be converted into two holiday flats and a private home for the new owner's family.
But the plan faces opposition from Minehead Conservation Society, which has vowed to fight it "tooth and nail".
The Promenade Hotel on The Esplanade, which specialised in holidays for disabled people, closed last September after making annual losses of more than £100,000.
Burnham-on-Sea resident Justin Taylor bought the Victorian property from charity Livability and has applied to West Somerset Council for permission to change the use from a hotel to holiday lets and a private home.
His agent, Chris Veale, said Mr Taylor wanted to restore the building to its former glory as a lack of investment over the years meant it was no longer viable as an hotel.
In the application, Mr Veale said: "An attempt to modernise the hotel and re-equip it would be financial suicide, the hotel is beyond economic repair and is a relic of the past.
"The hotel did not comply with fire regulations and could not be brought up to the standard required to continue as a hotel.
"The second floor had four guest rooms but they could not be accessed safely and were not in use.
"Therefore, only a maximum of five bedrooms were ever occupied requiring [staff] . . . to run the hotel at a huge loss."
Mr Veale said the hotel had been losing "in excess of £100,000 per annum" and was not attracting enough guests due to its "dated and shabby appearance and out-of-date facilities".
He said if Mr Taylor had not bought the hotel, it would simply have been closed and boarded up.
"The applicants intend restoring it to its former glory - it was built as a private residential property in 1905 and it will once again be an asset to the seafront, but still attracting tourists with a modern 4/5 star holiday flat unit adjacent," said Mr Veale.
"There are no alterations to the exterior of the building and there are no places to extend it in the future."
He said the proposed holiday flats would sleep a total of six adults and two children which would "more than adequately replace the usable holiday letting bedrooms of the redundant hotel".
But the application has attracted criticism from Minehead Conservation Society, whose chairman Sally Bainbridge said the hotel had provided a vitally important service for disabled people.
"The town desperately needs a mix of accommodation if it is to survive as a tourist destination," she said.
"Holiday flats have a role in that but not to the exclusion of all else.
"Elderly, infirm and physically handicapped people have very different requirements to young families and active retirees.
"This type of hotel serves a particular need for some of society's most vulnerable people and is one of which Minehead should be proud.
"With an ageing population, hotels of this kind are currently seeing a renaissance."
But Mr Taylor said no one had shown any interest in buying the Promenade for use as a specialist hotel in the two months it was advertised for sale.
In his own statement which accompanies the planning application, Mr Taylor said: "Local people were not excluded from bidding to buy the hotel and we are not 'London boys'.
"We are ordinary local people, a family who come from Burnham-on-Sea.
"Plenty of other hotels here and all over the UK have been closed and converted into flats - such as the huge property next door and the end of terrace across the road has a barn with planning permission for conversion into a holiday let. Why not us?
"We do not intend to apply for change of use to residential on the holiday flats at any later date and have not and will not be separating the services between the house and flats."