A joint letter to the editor, published in this edition of The Rip, claims the development would run in direct competition with existing providers, some already struggling to attract all-year round business.
The cabins are part of a proposed $7 million investment in the fort and ocean end of Hesse Street, aimed at boosting tourism.
“The Council has made the biggest financial decision of many years predicated on the belief that the financial problems of the town can be addressed by attracting high-end visitors,” the letter states.
“Accommodation providers are rightly concerned when our Council wants to undertake a commercial property development that will operate in head-to-head competition with existing businesses in Queenscliff and Point Lonsdale. We consider it wrong for the Council to materially impact the viability of current businesses given it is well known visitor numbers plummet in the off-season."
The federal government is contributing $3.5 million to the Destination Queenscliff project, the state government, $235,000 and ratepayers will chip in a further $400,000.
But according to the 10 providers, Council is pushing ahead with the strategy with little community engagement, no detailed business case and limited support for the cabins.
“We consider Council should be investing in making Queenscliff and Point Lonsdale a year-round destination clearly differentiated from other coastal towns - then everyone will benefit.
“Obviously this requires a well-conceived and community-backed tourism strategy and associated business plan to determine where the greatest return on investment would be. In the absence of this approach, spending enormous amounts of scarce funds on a housing development is shortsighted, disadvantages existing businesses and misses the point of why the Borough struggles outside the summer period,” the letter continued.
Destination Queenscliff also includes a new visitor hub, café, public toilets, BBQ facilities and new ship viewing areas. A pedestrian and bike path will extend around the front entrance of the fort and external brick walls will be lit up as part of a planned light show.
When originally announced in October last year, the then acting Borough CEO Jessica Chappell described the project as a proactive response to tourism challenges.
“This is a project that not just acknowledges the past, it recognises the present and it’s looking towards a prosperous future for the borough, for the community and for local business,” she said.
Council declined to comment on the accommodation providers’ letter.