Rickmansworth’s only remaining hotel could be demolished and turned into 31 residential units.
An application has been submitted to convert Long Island Exchange, in Victoria Close, into flats with associated parking and communal space.
This is the third application that has been submitted by property developer, Keay Homes, to Three Rivers to turn the hotel, which dates back to at least 1888, into homes.
A previous proposal, which was thrown out by the district council in December 2012, included demolishing the hotel and building 87 flats and five town houses on the site.
In March 2013, revised plans sought to build 65 residential units with associated accesses, basement parking and communal amenity space. This application was also refused.
Nina Hosking, chairman of the Rickmansworth Chamber of Commerce, said she is concerned what the impact of losing this hotel could have on local businesses.
Ms Hosking said: "Local businesses, both small and big, use it and I know the hotel has a very healthy occupancy rate. It’s such a popular place for visitors to stay.
"The only other alternatives if this hotel goes will be smaller bed and breakfasts or The Grove."
The hotel has a rich history, having once been home to composer Arnold Bax. It was also the venue for The Proms for two years during World War Two.
While the hotel has been locally listed, this does not protect it from development. However, local listing is a factor that both the developer and the district council must take into consideration when determining an application.
In a bid to protect the hotel from development, an application has been put forward to English Heritage to have the property listed as an historical building, which would grant it special protection from development.
Long Island Exchange was included under the Three Rivers’ housing allocation sites last year, along with other iconic Rickmansworth buildings, such as the Royal British Legion, in Ebury Road, and the former Police Station, in Rectory Road.
Ms Hosking added that it was "shocking" that the council included the hotel in its local plan for housing.
To date, 39 people have commented on the application via the district council’s website, with all but two objecting to the proposals.
The district council refused previous applications for reasons including the scale of the proposed building, inadequate parking and the increased strain the development would put on local amenities.
Keay Homes were unavailable for comment.