BOURNEMOUTH council’s planned £70million hotel would be a “white elephant” which would put competitors out of business and then go bust, says the boss of a national chain.

Robert Peel, executive chairman of Peel Hotels – which owns the town’s Norfolk Royale – is financing his share of a legal challenge to the local authority’s proposal.

The council intends to borrow public money for the project on the site of the former Winterbourne Hotel and adjacent car park, near the BIC. The scheme would include a high-end Crowne Plaza and a Holiday Inn Express.

Peel Hotels and another chain, Bespoke Hotels, representing several other operators, are seeking a judicial review of the project.

Mr Peel said: “We’ve had the new Hilton come into the town, which was on a competitive basis, normal commercial terms.

“I’ve got no issue with competition provided it’s on a level playing field.”

He said he “couldn’t believe the numbers I was hearing” when he learned of the hotel plan and that it was “clearly not competitive”.

Mr Peel previously grew the Thistle chain from a £300,000 company to the second largest hotel company in the UK.

“I like to think I know a little bit about feasibility. I can see nonsense a mile off,” he said.

“I just can’t understand why anyone can be allowed to borrow soft capital, £70m, at low interest to build basically a white elephant which is going to hurt all the hoteliers in the town when the council should be supporting those hoteliers.

“It wouldn’t be so bad if it was going to be a financial success, but it won’t be. In the end it will result in receivership and financial loss,” he added.

“If I’m right and it’s not commercial, it’s unfair competition, it’s going to have a bad effect on other heritage hotels in the town. Hotels are going to close, people are going to lose their jobs. All very well but if it’s going to go bust anyway, that seems a terrible waste.”

He said the council had set unrealistic estimates of how much the hotel and its associated health club would bring in annually.

“What they’re proposing to say to everyone, in terms of their return expectations, is that it’s going to see £15,000-£16,000 a room profit which is not sustainable in a provincial town,” he said.

“Maybe you’d get it in Manchester, Edinburgh or Glasgow, but certainly not Bournemouth.”

He added: “The council shouldn’t be in the hotel business.”

Bournemouth council has said the plan would help “position the town as a lead player in the conferencing and events market” and that an independent report supported the case for the project.

Bill Cotton, the council’s executive director for the environment and economy, has said the council would use its “favourable borrowing position” and select an “experienced operator”, while “industry-backed projections” showed it would earn enough to repay the loan.

QC has been on the winning side

THE hoteliers challenging the scheme have hired one of the top experts in local government law – and a name familiar in Dorset.

James Goudie QC was hired by Bournemouth council when its then leader, Cllr Stephen MacLoughlin, was being investigated over porn found on his council laptop.

Another lawyer had concluded that Cllr MacLoughlin had breached the members’ code of conduct, but Mr Goudie’s second opinion said the code had not been broken.

Mr Goudie was later hired by Cllr John Beesley, who spent £20,000 defending himself against a complaint that he had failed to properly declare an interest when chairing the borough’s planning board. A national tribunal took an hour to clear him.

In 2014, Christchurch firm REIDSteel hired Mr Goudie to report on whether Cllr Spencer Flower had failed to declare an interest in planning policy when he was leader of East Dorset District Council.

A court eventually found that Cllr Flower contravened the Localism Act, although he stood to make no personal gain. He was given a six-month conditional discharge.