Observer readers said the site should be kept as a hotel but needs 'cleaning up'.
Town councillors were torn in their decision to either continue investigating further options for the site, or to terminate the project at a meeting on Tuesday night (August 14).
The vote was split four against four with town mayor Stephen Reynolds having the final say and voting to investigate options for the hotel.
Observer readers shared their views on the future of the historic site with many saying the site should be kept as a hotel.
Commenting on the Bognor Regis Observer Facebook page, Jenny Catling said: "Such a beautiful looking building, obviously part of the history of Bognor needs to be preserved." Jenny suggested turning the building into something that will attract people to visit the town on holiday and bring more life back to the town."
It was revealed at the meeting that Butlin’s had shown an interest in the project, as well as interest from Goodwood from an ‘advisory point’.
Michelle Murphy called the decision a 'no brainer' and recommended that the hotel be used for 'multifunctional purposes' and even a boutique hotel or bed and breakfast.
A planning application to convert the Royal Hotel into 18 flats was granted in September last year.
Sylvia Endacott said: "We need something done quickly, before it deteriorates further. Our accommodation for visitors has declined so much."
Earlier this year the town council revealed it was considering restoring the site in The Esplanade as a boutique hotel, chef training facility, council offices and community space.
Christine Hopkins called the site an 'eyesore' and said: "It could at lead be de-weeded and kept looking clean."
Maria Cook said: "They should insist the owner at least cleans it up, if not the council could do it and send him the bill."
At the council meeting, Sandra Daniells Independent aligned Conservative said she thought the project was a ‘dead-duck’ and said: "Everything is pointing to the fact that this isn’t completely viable."
Labour’s Jan Cosgrove said that similar schemes had worked elsewhere and that he considered it an important site.
He said: "It could have some value as a project to take on board.
"It doesn’t hurt to keep this on the table."
Progress and developments about the project will be discussed at another council meeting set for November.
Lib Dem Matt Stanley voted against further investigation into other options.
He said: "I’m left with no doubt that it wasn’t achievable for us.
"As much as it is something I would like to see happen I don’t see how we would achieve it."