Dublin company Tetrarch Capital is seeking permission from Cork City Council to redevelop 7 to 9 Parnell Place to create a 165-bedroom hotel.
The buildings were previously occupied by Flor Griffin and Maher Sports.
The application also involves the demolition of buildings to the rear of the premises facing onto Deane Street where the entrance to the hotel will be located.
A historic laneway that previously existed between the two buildings, linking Parnell Place to Deane Street, will also be reinstated.
Development company JCD, who have completed a number of office developments in Cork including the Capitol redevelopment and is building new offices on the South Mall and Penrose Quay, made a submission in support of the planned hotel.
"We and many of our client companies have experienced difficulties in securing hotel rooms in the city and this proposed development will help to address this shortage," JCD said in their submission.
Construction company BAM made a similar submission saying extra hotel accommodation is badly needed in Cork.
However, a number of residents of Lower Oliver Plunkett street raised concerns about the development. They argue the proposed hotel would overlook the rear of their homes.
Residents living between 16 and 20 Lower Oliver Plunkett Street said they welcomed the hotel's development but said the removal of the setback and raising a party wall would harm their backyard space and create a "Cramming & Canyon Effect."
Planners in City Hall have now written to the developers asking them to revise their plans. In particular, they said they have serious concerns about the impact the hotel would have on the Lower Oliver Plunkett Street homes and asked for the removal of three hotel rooms at the second floor along with other modifications to the plans.
The developers now have six months to supply the revised information after which the Council has four weeks to make a decision.