Should palaces become hotels?

Palais Episcopal in Rodez

The Bishop's palace in Rodez has been owned by the Aveyron department since 1906, but has stood empty since the Bishop left last year. No plans have been made to use it by the commune, but a businessman, described as "contentious" has sought permission to create a 5 star hotel, with gourmet restaurant and brasserie. Promising to invest 5 million euros in the project if the council will grant him a long lease.
Having already started some work under a temporary lease Mathias Echene has been ordered to "give back the keys" by the Conseil Departmental, who have refused to sign the lease.
This comes on the heels of the Greater Figeac council re-considering the fate of a castle at Figeac.
The subject of a similar proposal by an anonymous businessman the chateau Le Viguier du Roy, the former 4 star hotel has been closed for seven years as it was unprofitable. The purchaser says his plans are more modest, but he already owns three such chateaux which he has restored and  runs on a "not-for-profit" basis. The local community of communes, headed by Martin Malvy the former president of Midi Pyrenees region, is sceptical and is considering a pre-emption of the sale.
The problem highlights the difficulty of dealing with these heritage buildings; how to preserve and valorise them without costing the taxpayer large sums - or should we be prepared to invest to keep them viable?