Managers at Himley Country Hotel insist they are determined to stay open after surviving a closure order brought by police and the council.
The closure order was served last week to prevent antisocial behaviour and disorder but was subsequently dismissed at Cannock Magistrates Court, meaning it can stay open in a blow to South Staffordshire Council and police chiefs.
Stephen Carter, a manager at the hotel on School Road, said thousands of pounds were being invested into the hotel and there was a plan to welcome locals to an open day-style event in a bid to improve relations and earn trust.
He blamed a lot of the issues at the hotel on the fact it had hosted early-release prisoners during the pandemic. He said bosses were also unaware of a cannabis farm which was discovered at the hotel in July.
Mr Carter, who was brought in during June to try and get the hotel back on its feet, also confirmed approved proposals to knock down the hotel and build homes would now not go ahead.
He said: "It was made clear in court that a lot of accusations against the hotel were quite historic. There was a lot of talk amongst villagers but it was just that - talk, hearsay. There was a cannabis farm found. We don't deny that but we didn't know about it.
"The hotel bedrooms are not going to interest locals but as for events - weddings and birthday parties - we always did have a good reputation for that. That's what we want to keep alive. We have got to get that relationship with them."
Early-release prisoners were brought in during the pandemic when the hotel could not welcome guests.
But Mr Carter said: "It was a good idea at the time but it backfired on us. People put in there were causing trouble and residents were quite rightly unhappy about it. The authorities put them in without any security."
It is currently unclear whether the police and South Staffordshire Council will make further attempts to have the hotel closed.
Councillor Rita Heseltine said when the notice was served "this kind of behaviour can’t be tolerated any longer".
Acting council leader Roger Lees said: “South Staffordshire Council will continue to support residents to feel safe in their local community."