Andrew Brownsword Hotels has said it will put the Royal Clarence hotel in Exeter up for sale three years after it was gutted in a devastating fire.
Owner Andrew Brownsword explained that the "heart-breaking" decision had been made as costs already incurred in the demolition, historic restoration and enabling works had left the group "unable to deliver a hotel, as we had so hoped to do".
The Grade-II listed, 53-bedroom, four-AA-star hotel, believed to be one of England's oldest hotels, was destroyed in October 2016 by a fire that had broken out in the adjacent Castle Fine Art Gallery building.
The hotel group had initially hoped the property would reopen this year, but enabling works took longer than planned.
Announcing the decision to sell, Brownsword said: "We stand with the people of Exeter that this is such an important area of the city and so have made the very difficult decision that it is now time to seek new owners for the site, in order that the rebuild can progress.
"The extensive recovery and preparation work that has been completed at the site means it now offers an excellent opportunity for the next stage of development and I have had to concede that this will be realised by others.
"It was always my vision to deliver a new hotel at the level of luxury and quality as others within our group, however, the financial and resource investment made in the demolition, historic restoration and enabling works has been significant and this has meant that it is regretfully unviable for us to develop the level of hotel that we had envisaged.
"This has been a heart-breaking decision for us to take, but, alongside the residents of Exeter, we want to see this corner of Cathedral Yard resorted to its former glory. We believe that selling the site now to a group that operates to a different business model to ours, will enable them to start building, unencumbered by all of the challenges and costs already overcome by us, and is the only way we can conclude to make the rebuild happen quickly and viably. We thank all the people of Exeter for the patience and support that we have been shown since the night of the fire."
Brownsword bought the 53-bedroom hotel in 2003 for £4.5m and later transformed it to the four-AA-star Abode Exeter. Following the fire he said that he intended to rebuild the hotel "with enormous sympathy to its importance and heritage".
Abode Exeter is one of five hotels within the Abode brand owned by Andrew Brownsword Hotels, which is also the owner of a further nine individual properties including Gidleigh Park and the Bath Priory.