MP Gillian Keegan said she is concerned and disappointed at moves to house asylum seekers at a hotel in her constituency.
The Chichester Park Hotel will be taken over next week, with a third party leasing the building. It is being considered for housing more than 100 asylum seekers.
The MP for Chichester said she has contacted the Home Office and will “monitor the situation”.
Ms Keegan, who is also Education Minister, said: “I have recently been informed that a hotel in Chichester has been in private discussions with the Home Office for consideration as contingency accommodation for families seeking asylum.
“I share the concerns that have been raised over the repurposing of the hotel, particularly around a busy tourism season for Chichester and the impact that additional families will have on local services. I am clear that the use of hotels as contingency accommodation is not the right solution for asylum seekers or the local community.
“I have raised these concerns with the Home Office and will continue to monitor the situation closely, to ensure that residents’ views are heard.
“I understand residents’ frustration that there was no local consultation and that employees of the hotel are concerned about the future of their employment.
“Whilst this is ultimately an individual business decision, it is disappointing that local residents and myself have not been part of the discussions.”
A member of staff at the Chichester Park Hotel told The Argus that the hotel was being leased to Fairer Places Ltd for a period of 18 months.
The Argus understands that Fairer Places would help the Home Office to provide accommodation for asylum seekers at the hotel.
The Home Office refused to confirm or deny that asylum seekers would be housed at the hotel.
Hundreds of bookings at the hotel, including Christmas parties, have been cancelled as a result of the plans.
A spokesman for the hotel stressed that many of the bookings had been transferred to another local hotel and would be honoured.
The use of hotels to house asylum seekers has come under fire after scores of young children went missing from similar hotels in Brighton earlier this year.
Plans have since been considered to temporarily house asylum seekers on a barge in Dorset and on the site of the former Northeye prison in Bexhill.
In a joint statement, Chichester District Council and West Sussex County Council confirmed that “a hotel in the Chichester area is being considered for use as contingency accommodation for people seeking asylum”.
They added: “Decisions around use of hotels and placements for those seeking asylum are made by the Home Office. We are not involved in the decision-making process.
“Should members of the public wish to contact the Home Office directly they can be contacted on email@example.com or by calling 0207 035 4848.”