William Gray Construction has submitted a planning application to the Highland Council to build a £4m hotel at 92 - 94 Academy Street.
The project would create 150 construction jobs and 55 hotel jobs if planning permission is granted this year.
The Board of Directors at Inverness BID and heads of Inverness Chamber of Commerce and Scottish Council for Development & Industry (SCDI) believe the project would act as a catalyst for regeneration in this area of the city.
Craig Duncan, Chairman of Inverness BID, said: “The Board of Inverness BID fully supports these proposals and the designs for the new building.
“The current building is in a poor state and we accept that it is not commercially viable to retain it.
“We feel it’s important to stress this development will bring significant economic benefit to the area. The City Centre Development Brief sets out opportunities to improve the commercial vitality of the city centre and this project is clearly aligned with these goals.”
Stewart Nicol, Chief Executive of Inverness Chamber of Commerce, said: “I wholeheartedly support this project which sits very well with HIE’s recent Accommodation Audit.
“The audit highlights not only the region’s growing economy and demographic but also the untapped potential in the leisure tourism market.
“In-depth research has shown a clear need for quality accommodation in the city centre to better suit the needs of visitors who travel to the area either for business or leisure.”
William Gray Construction has been working with the Highland Council for five years to develop a proposal appropriate for the site on Academy Street.
Fraser Grieve, Highlands and Islands Manager at SCDI, said: “It is good to see a Highland business having confidence to progress development plans and investment in the area.
“Inverness has much to offer and we must ensure that it is able to meet the needs of current and future economic growth.”