The plans to turn the Rollers Arms public house, off Foundry Street, into an HMO had been lodged with Dudley Council.
Planning documents revealed that the premises had been operating as an HMO for a number of years without the relevant planning permission in place. The pub ceased trading in 2015.
A design and access statement, submitted with the plans, said: "The Rollers Arms is a former public house which has in recent years been used as a House in Multiple Occupation, albeit without planning permission.
"The use as a House in Multiple Occupation has been undertaken without the benefit of planning permission and is now the subject of an Enforcement Notice.
"Due to the location of the property and changes in social habits in recent years, the use as a public house is no longer considered a viable option.
"Having considered the options the owner considers that a small hotel use, due to its location close to rail, bus and cycle routes, offers the most realistic option. The owner proposes a small 9 bed, boutique hotel serving local needs, such as those attending weddings etc., as well as local businesses and those working in the area on short-term contracts. Custom may also come from users of the nearby cycle route."
Letters of objection had been received by nearby residents, including local Councillor Sue Ridney who said “the application for a change of use to a hotel is inappropriate for the location of this property”.
But in refusing the plans, a planning officer stated the proposals were "not considered to be accepted in principal".