Launceston will soon welcome a new hotel, which industry leaders say is a key need for the city.
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The old TasTAFE building, which was purchased by Red Panda Property on April 14, will be developed into a premium art hotel.
The building is a heritage listed building in a heritage precinct.
The redevelopment will feature boutique residential accommodation, hotels, restaurants and cafes, specialty bars, and office space.
Chamber of Commerce executive officer Will Cassidy said the redevelopment will be a welcome opportunity.
"They have picked a really fantastic spot for a hotel because the view looking west from the courtyard of the building beautifully highlights the gorge," Mr Cassidy said.
He also mentioned that pre-COVID modelling of hotel room numbers required in 2024 and beyond found that Launceston would be wanting for more.
"The demand for hotel rooms in Launceston will keep increasing," Mr Cassidy said.
"Particularly as we have been highlighted as a fantastic location thanks to our designation as a UNESCO City of Gastronomy."
Mr Cassidy said the mix of food and hotel would "link Launceston's two very distinct food precincts".
"There is the Cataract on Paterson, Stillwater precinct at one end of the city and then George Street on the other end. One in the middle would connect the two," he said.
"Generally, any development in the city is a good thing."
Tourism Industry Council's Luke Martin said it was exciting to see developers looking at opportunities like boutique hotels.
"Particularly, heritage rich buildings being reused," he said.
"That's important because it's what the city is known for.
"There are now two or three hotel proposals that are now in varying states of approval around the city. We want to see growth, we want to see the numbers but we also need to make sure we are growing the demands to fill these hotels."
Red Panda Property managing director Andrew McCullagh said the opportunity to take on the building has been a long time coming.
"I put an offer on this building about 18 months ago, not really knowing what what we're going to do," he said.
"There is strong demand for hotels and this site fits in really well with the fabric, fits in really well with the area."
The $35-50m project will be ready to go in about four to six months but Mr McCullagh said maintaining heritage was a key priority.
"One of the calls we made was to Heritage Tasmania and had them through the site," he said.
"We got them in as early as possible to get their feedback.
"I appreciate marrying up the architecture with sympathetic development and not bastardising it."
The hotel will sit in the back corner of the building, so it won't over impose the building.
"It will over look the the Royal Park, looks towards the river and the silos," Mr McCullagh said.