BUDGET hotel chain is looking to open a new £5 million property in the Lake District – sparking fears it could drive small B&Bs to the wall.

Premier Inn plans to open a 64-bedroom family hotel at a former University of Cumbria property on The Struggle in Ambleside (pictured), bringing 30 full and part-time jobs.

But B&B owners fear the chain will slash room rates in the off-season – cutting a vital source of income which keeps many afloat during winter.

Tourism bodies are divided with Cumbria Tourism saying the new jobs should be welcomed and that a national hotel chain would help lure more visitors.

But the Lakes Hospitality Association believes national budget brands could harm the ‘character’ of the area and that a price war would be unwelcome at the cheaper end of the market.

Company representatives insist its ‘small on-site restaurant’ will be ‘predominantly aimed at providing guests with breakfasts and light meals but would not compete with existing restaurants and pubs in Ambleside'.

Residents on The Struggle fear ‘horrendous’ access problems up the steep hill leading on to Kirkstone Pass, because 65 car parking spaces are planned.

Premier Inn offers cut-price rooms starting from £29-a-night and confirmed to the Gazette it has purchased Hilltop, a significant former University property – dependent on planning permission.

It has held preliminary talks with the Lake District National Park Authority ahead of tabling a full planning application.

It will unveil the plans on March 28-29 at The Parish Centre in Ambleside.

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Nick Johnston, of Whitbread Hotels and Restaurants – owners of Premier Inn – said: “We understand the beautiful environment that is Ambleside and the need for a sensitive design and operation of the hotel. We ensure our hotels are fitting of their locations and we manage all of our hotels very intensively.”

Tony Blaney, chair of the 200-member Lakes Hospitality Association, said: “There’s no reason to fear new hotels but we know these big groups can slash prices to sell rooms and that will seriously affect the independents who don’t have their buying power and low overheads.

Paul McDougall, who runs B&B Elder Grove, said: “Adding so many more bed spaces to the town could be detrimental to the small independent accommodation provider - especially during the quieter periods of the year where chain organisations can undercut prices with national offers and subsidise their lettings.”

“Chain accommodation providers do not look at local purchasing and the sustainability of the town community as we and many others do - thus causing a knock-on effect to the local shops, those providing our eggs and bacon, bread and butter or the local tradesmen helping to maintain all the individual properties the area provides.”

Terry Davey, who owns the 26-bed Queen’s Hotel in Ambleside, said: “It’s not brilliant news for the smaller B&Bs. The vast majority of tourists come to the Lake District to stay somewhere appropriate to the area - not a chain hotel. But at the end of the day - the newness, parking and price is going to be a factor.”

Ian Stephens, of Cumbria Tourism, embraced new hotel developments and said: “As well as providing employment opportunities, any additional Premier Inn properties will add to rather than detract from the wide range of high quality accommodation provision that already exists.”

Harry Manning, of Ambleside Civic Trust, said it was likely to object on the grounds of traffic, loss of a potential housing site in Ambleside and the impact on residents.

Ambleside councillor, Heidi Halliday said: “A Premier Inn would be a case of robbing Peter to pay Paul - taking business away from our smaller establishments who simply cannot compete.”

The Lake District National Park Authority confirmed that a formal application had not yet been submitted but would be considered in due course.

Meanwhile, Travelodge have denied rumours circulating in the village that it is behind the purchase of the Kelsick House and Grammar School on Stockghyll Lane, which was recently on the market for £1 million.

Agents for the sale, Kendal-based Michael CL Hodgson said the sale had not yet been completed and in any event, it could not reveal the identity of any purchasers.