An historic hotel that is facing “severe economic hardship” is hoping to safeguard its future by developing part of its site for housing.

Former Victorian hydropathic establishment The Craiglands Hotel, on Cowpasture Road, Ilkley, is “running at an unsustainable level” say planning consultants.

It is hoped that a plan to build four-storey homes could secure the future of the hotel by generating cash for improvements including a new spa.

A planning application to build nine houses on a car park in the grounds, and create a spa in the hotel’s basement, has been submitted by Craiglands Ltd to Bradford Council.

The proposals are to build one block of five houses and another or four. The houses would have three to five bedrooms. In a statement accompanying the application, planning and development consultancy, Pegasus Group, says the 19th Century building is a grand and expansive hotel which requires constant upkeep and maintenance.

It said: “In order to remain competitive and secure the long-term future of the Craiglands Hotel significant investment is required to upgrade the hotel facilities. The hotel is currently running at an unsustainable level, and is therefore in need of considerable investment which, through residential development of the adjacent car park, will enable improvements and a new spa facility to be provided at the hotel, which in turn will increase occupancy.”

Built in 1859, the Craiglands is classed as a key unlisted building within the Ilkley Conservation Area. Previous housing plans, for 14 and 13 homes, submitted in 2008 and 2009, were both withdrawn.

Members of the public can now make representations to Bradford Council on the application.

A Heritage Appraisal submitted in support of the application said: “The Craiglands Hotel is an important historical and architectural feature of Ilkley.”

It says the hotel faces a ‘challenging future’ during a time of severe economic hardship.