TOURISM experts claim Colchester needs four new hotels if it is to cash in on international visits, Destination UK can reveal.
The local council says accommodation capacity is a key issue that needs to be addressed in order for the town to realise its potential.
The study into hotel accommodation capacity was completed by Humberts Leisure to assess trends and consider developments and potential developments.
Council spokesman Karen Turnbull said: "Increasing accommodation capacity in Colchester is vital if we are to encourage more short breaks here.
"Currently most of our visitors are daytrippers. We need to do two things: encourage those daytrippers to return here and stay over night and also encourage more people than ever before to visit Colchester on a short break."
It says the town needs a boutique hotel of 20-40 rooms, upper 3 / 4 star, in the town centre; a branded budget, 3 star hotel of 50-100 rooms, edge of town centre; a large nationally branded upper 3 / 4 star hotel of 150 rooms with conferencing facilities and, towards 2010, a large branded 3 / 4 star hotel, out of town centre with easy access to A12.
Karen added: "The Council's tourism team had felt a need for increased accommodation capacity in and around Colchester for some years and it is good to have this confirmed by an official study into the availability of hotel accommodation locally.
"It will prove invaluable to developers looking to invest in hotel construction and refurbishment as well as the Council's Planners when receiving applications for new developments."
The report found hotels are turning business away because they have such full occupancy.
Coun Christopher Arnold, added: "There are few destinations, especially in the East of England Region, which can claim to have such tourism potential."