Proposals to build a 128-room hotel on the town's racecourse and create a new entrance were announced on Tuesday .

Managing director Huw Williams said: “Nine years ago, the central grandstand underwent a £3million refurbishment and two years ago the racecourse celebrated its 300th anniversary and marked it with the completion of the new 1707 Building.

“Now we want to continue our investment by constructing a new hotel which will also serve to create a grand entrance to the racecourse."

Mr Williams hopes to have planning permission for the project by the end of the year but is keen to find out what residents think of the plan before putting in an application to Warwick District Council.

He is hoping work will start some time during 2011 and estimates it will cost between £8 and £9 million.

He added: “The racecourse currently hosts a limited number of one-day conferences. Most conferences last two or three days. With a hotel on site, the racecourse will be able to expand this activity into two and three-day events.

"The proposed hotel will represent a tremendous improvement, replacing the existing, ugly turnstiles and an uninspiring groundsman’s bungalow."

The new venture is expected to create extra cleaning, reception and kitchen jobs and Mr Williams believes it could encourage more visitors to come to the town."

He added: "Apart from racing and conferences, the hotel will also attract tourists who want to stay in Warwick and spend money in the town’s specialist independent shops, restaurants and pubs.

“In constructing a new hotel on the town’s doorstep, we will be supporting local councils’ aspirations to increase tourism.”

Mr Williams is not put off by the current economic recession and believes now is an ideal time for the business to grow. He added: "The cost of building will be cheaper than it would be. You can't stop for the economic climate."

Consultants and representatives of Warwick Racecourse will be on hand to answer questions at a public exhibition at Warwick Racecourse's main grandstand between 3pm and 8pm on Wednesday.

Last month, Premier Inn also announced plans to build a hotel on the Opus 40 Business Park creating around 50 jobs.

Warwick town councillor Michael Kinson (Con, Warwick West) said: "It's a two way process. We have tourism and jobs but then we also have a larger building being put into that spot.

"I don't think people living opposite will be very happy.”