The owners also challenged that decision, but judges at another tribunal ruled in the council’s favour again, according to the Local Democracy Reporting Service.
Judge Johns KC said a room could not “be turned into a flat simply by plugging in a microwave.”
He added there was “no relevant storage, no food preparation area” and that planning laws were supposed to “protect people in the occupation of their homes, not to encourage them to cook their own meals”.
Despite the second rejection, the company has now sought to appeal the verdict.
A hotel spokesman said the building stopped housing homeless people about two years ago.
Paul Wells, the council’s Conservative portfolio holder for licensing, said the authority was “delighted” with the ruling, which “sets a precedent for all local authorities that want to improve housing standards for residents”.
“Our teams worked exceptionally hard to achieve this result and deserve real credit,” he added.