Anti-arms protesters are planning to demonstrate during the Queen's Diamond Jubilee weekend.
Smash EDO is calling a rally on Monday, June 4 - the third day of the extended Bank Holiday weekend marking 60 years of the Queen's rule.
Critics say the plans could disrupt the city at a time when it would hope to attract thousands of holidaymakers.
Smash EDO, whose previous events brought hundreds of people onto the streets and triggered violent clashes with police, has earmarked the day as part of a planned “Summer of Resistance”.
The group has campaigned since 2005 to close the EDO factory in Home Farm Road, Moulsecoomb, Brighton, which it says makes parts for weapons used by Israel in military action against Palestine.
At the last major Smash EDO demonstration in 2010, 53 out of 200 protesters were arrested in Lewes Road.
Cost estimates for policing that day and at previous events have run into six figures, including a £310,000 bill for policing on May Day 2009, when running clashes brought the city to a standstill.
An internet post in the group's name describes the June 4 event as a “big demo”.
It reads: “If you have been to any of our previous ones, such as the carnival against the arms trade or the 2009 Brighton Mayday you know what we're talking about!
“And since June the 5th is also a bank holiday on account of the diamond jubilee, this is the perfect time to make it down to Brighton!”
Councillor Geoffrey Theobald, leader of the council's Conservative group, said: “They are not thinking of the residents or businesses in Brighton and Hove in my view.
“We are a holiday resort. We are here to attract people into our city.
“Everyone is entitled to demonstrate in a democracy but I think it is quite unreasonable to pick that time.”
Councillor Ben Duncan, Brighton and Hove City Council cabinet member for communities, equalities and public protection, said the event should not be treated as anti-jubilee.
The Green councillor, who has attended previous Smash EDO demonstrations, said the city had built up trust with protest groups in its handling of the Occupy Brighton and Spanish Revolution camps, and would not oppose any protest.
He said: “I'm sure people will criticise their lack of respect for the jubilee.
“The jubilee is irrelevant to attempts to ban an arms factory.
“Public order policing can be very expensive but it is not expensive if the police take quite a hands-off approach and that is what we'll be encouraging them to do.”
In the past, police have criticised Smash EDO's refusal to inform them of its plans for similar events.
Chief Inspector Paul Betts, of Sussex Police, said yesterday: "We would welcome contact from the organisers in order that we can discuss proportionate policing of any demonstrations or protests that they are planning."