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Waterfall Park Developments Ltd applied in April for resource consent for the development, which would include a wellness centre and conference space, at Waterfall Park and on adjoining Ayrburn Farm land.
Queenstown Lakes District Council planners have recommended the project go ahead, subject to various consent conditions, including earthworks and water management provisions.
The report states: "It is considered that the adverse effects of the activity will be no more than minor."
A total of 13 submissions were made on the plans. Twelve opposed the development, including several residents and the Friends of Lake Hayes Society, which argued the plans would increase the risk of sediment loss into nearby Lake Hayes and Mill Creek.
Society secretary Richard Bowman said the council and developers should be "cautious" about the downstream effects of sediment loss.
"Any additional input of sediment into the lake has got to be of concern.
"We don’t feel the council have put significant weight on the downstream effects of the activity."
Critics raised concerns about a lack of infrastructure to cope with the proposed development.
In June, commissioners had approved the company’s plans to build an 870m road access-ing the site.
Since 2015, three separate proposals made by developer Winton Partners, which is behind the proposed Waterfall Park project, have been rejected by the council.
The previous proposals included retirement complexes to be built on Ayrburn Farm land and a 141-lot subdivision.
Waterfall Park Ltd also called for a large section of land north of Speargrass Flat Rd to be rezoned as part of the council’s proposed district plan, at a hearing in July.
The developer wanted the rezoning to allow a residential development of up to 200 units near the proposed hotel complex.
A public hearing on the four-star hotel proposals was scheduled to take place on January 22-23.
Mr Bowman said he hoped the hearing could be pushed back until freshwater ecologist Marc Schallenberg returned from the Antarctic in February, so the group could present its evidence in full at the hearing.