The Georgian hotel in Haslemere has submitted plans for an extensive transformation after falling into administration twice.
The new owners of the 43-bedroom, Grade II-listed hotel have applied to Waverley Borough Council for planning permission to refurbish the main hotel building and transform its 31-bedroom annexe and spa into flats to allow the property to focus on a 12-bedroom, higher quality boutique offering.
The hotel was owned by Hollybourne Hotels but went into administration, along with the company's four other hotels, in February 2014. Sarah Burke and Mark McVeigh acquired the hotel out of administration in May 2015 and operated it under Lionhouse Hotels.
However, the hotel went into administration again last year and was bought off a guide price of £2.5m in August by Lannister House, a company operated by five families, including McVeigh.
The planning application says the objective is "to secure a viable future" through a more manageable operation for the owners, a more appropriate offering to visitors and higher quality food and beverage facilities.
It reads: "The need for the development proposals has arisen from the difficulties faced in running and operating a large hotel and food & beverage business which have resulted in the two previous owners being forced into administration. Despite its location, the hotel has been struggling to operate a viable business in its current form."
The property is described as "very tired" and in need of a "significant overhaul", carrying a high cost versus income "and ultimately it does not satisfy the local community's needs".
"Community feedback and support for the hotel has indicated that the Georgian needs to lift its offering to reflect the wants and needs of the local clientele, particularly in regard to a better F&B offering in a town that desperately requires more choice," the report continued.
The flats, as well as plans for three mews cottages in the property's overspill car park, are hoped to raise £2m to fund the refurbishment.
The property dates back to the 18th century and has operated as a hotel since the 1920s.