Wincanton's newest hotel could boost the town’s economy by nearly £1 million in its first year of operation.

The figures from Travelodge’s tourism investment survey show its newest branch in Long Close development could generate £898,776 for town centre shops and surrounding businesses.

Town leaders say the prediction could not have come at a better time, with the town still reeling from the announcement that one of its biggest employers, Adams Foods, is to close.

The hotel plus a KFC and Marston’s pub, which will be built alongside it, will create around 100 jobs once complete later this year.

Town mayor Colin Winder, said: “If these figures are accurate, it would be a massive boost for Wincanton.

“The town has suffered over the last year so this kind of news is great. These jobs will be sought after and are exactly what the town needs.”

Mr Winder said there was still potential for more businesses to set up at the Long Close site and he was exploring options to encourage more retail units there.

The figures were calculated by combining the average occupancy figure with the average spend of £36 per customer outside of the hotel.

The 57-bed hotel development has not been without its difficulties, as it was due to open early this year.

A dispute over legal fees between Somerset County Council and building contractor Hopkins Developments stalled the project.

The council needed to agree a new internal estate road and improvements to the A371 as an obligation of the planning approval. The row centred on fees the council was trying to claim from Hopkins for work the council’s legal team undertook.

But groundwork is now well advanced and a completion date has been pencilled in for October.

Although Wincanton Businesses Together chairman John Smith welcomed the news, he said the town should be cautious about the direct benefit to the locality.

“I would be interested to see how Travelodge breaks that figure down,” he said.

“I can see the annual wage bill for full and part-time staff benefiting our local economy, that is fairly standard.

“We need to be careful how we interpret the other financial benefits. After the wage bill, where will the money be spent that benefits our local economy?

“Money spent in Morissons or Lidl brings no extra benefit that I can see. It helps their profit lines and any shareholders who live far away from our town.

“We would need to see this money being spent in local businesses that are owned and staffed by local people.

“If it doesn’t, we are getting nearer to having a profitable retail park on the edge of Wincanton, that brings no benefit to our local business community.”

Across the UK, Travelodge is opening 41 new hotels this year creating 1,000 new jobs.

Chief executive Guy Parsons said: “Despite the ongoing tough economic climate, Travelodge is continuing to open hotels at a faster rate than anyone else and create much-needed jobs, which is exactly what the British economy needs right now.”