Hoteliers could face prosecution if they take up the offer of housing a rising number of asylum seekers.
They have been told they could risk legal action if they cater for asylum seekers on a long-term basis.
Hotel owners in East-bourne received a letter this week asking for accommodation for people seeking refuge in this country.
It came from a Brighton company called Venture International Projects and offered six-month contracts to provide the asylum seekers with a bed and three meals a day.
Any hotels deciding to sign up to the deal would receive £100 per person per week, but the letter stated yearly contracts were preferred.
Hotels risk prosecution for breach of planning regulations if they provide the asylum seekers with long-term accommodation.
Bob Lacey, deputy leader of Eastbourne Borough Council, believes all the hotels and guest houses in Eastbourne have enough trade already and so there is no need for them to take advantage of the scheme.
He said: "This is the height of the tourist season and it would be impractical for any asylum seeker to consider being housed in Eastbourne at this time.
"There have been days this year when visitors couldn't get a room in the town.
"Genuine asylum seekers and those working on their behalf are looking for placements in permanent homes, not hotels, so it is unlikely Eastbourne would be a preferred choice for these placements."
Borough councillor and Eastbourne Hotels Association deputy chairman, David Elkin, said: "I would be surprised if there is anywhere in town with vacancies at this time of year.
"I can't see hotel managers taking up the offer to house asylum seekers for this price when they can fill their hotels with paying guests."
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