Walter Roban’s decision to approve Westend Properties’ request for a special development order was applauded by organisations focused on the financial ramifications of the development going ahead.

Tracy Berkeley, the chief executive of the Bermuda Tourism Authority, described the renovation of the Fairmont Southampton as “a positive step for Bermuda's tourism industry” and “an exciting opportunity to increase the airlift to Bermuda”.

Ms Berkeley said: “Additionally, it will lead to a much needed increase in hotel bed inventory available, which is essential to meet growing demand and increase group-sales bookings and revenue.

“The approval of the SDO is an endorsement of the Government’s commitment to enhancing our island's appeal as a world-class destination that will benefit both our tourism industry and our valued residents.”

The Bermuda Hotels Association was also strongly in support.

Stephen Todd, the association’s president, said the approval was “welcome news to our key tourism industry sector”.

He said: “At the time of the closure of the hotel, the BHA are on record as supporting the redevelopment of the hotel, as it represented then, and continues to represent an important part of our destination hotel room inventory, as well as it being a key guest property in providing group business meeting facilities.

“The BHA is looking forward to hearing further news with respect to the starting date for the redevelopment of the main hotel building, which we anticipate will include the announcement of the reopening date of the property, when it will once again be welcoming business and leisure guests”.

Danielle Riviere, of the Bermuda Chamber of Commerce, said that Mr Roban had had a “challenging” decision to make when considering the economic and environmental effects of the development.

“The Government had to carefully consider the broader implications of this significant project as it relates to the wellbeing of the people of Bermuda,” Ms Riviere said before declaring that long-term economic benefits outweighed any environmental negatives.

The chamber’s chief executive said: “The opening of the Southampton Princess will have a ripple effect on our island's economy, boosting tourism, improving airlift, increased housing units and providing valuable employment opportunities, both during the construction phase and after the hotel's opening.

“We appreciate that every situation must be evaluated on its own merit, and in this case, support the Government’s decision to focus on the long-term impact to our economy.”

The news was celebrated by the Bermuda Industrial Union.

“In the short term, there will be an increase in construction jobs, and this work will require a significant workforce, which includes labourers, carpenters, electricians, etc,” the union said in a statement.

“Additionally, it will bring increased business for local suppliers. In the long term, the residential units should provide an increase in occupancy rates, which will help sustain the long-term viability of the hotel and the job of its employees.

“We look forward to the project beginning and many displaced workers getting back to work!”