West Lindsey District Council has defended spending more than £2 million on a hotel 75 miles away in West Yorkshire.
The council bought the Travelodge on the outskirts of Keighley in October, for a cost of £2.35 million.
It is the first property the council has bought outside of district boundaries, and is part of its investment strategy agreed earlier in the year.
The council has funded the cost of buying the hotel from its own internal borrowing.
Council officials have said that the hotel will provide a net income once borrowing is in place of around £90,000 per annum to the council for the period the asset is held by them.
Leader of West Lindsey District Council Jeff Summers said: “The acquisition of the hotel in Keighley is just one way in which we are looking to increase our revenue income to sustain services.
“This along with a continued drive for efficiencies will ensure the council has a sound financial position over the next five years and beyond.
“Investments inside and outside the district will generate income and that will be used to support the investment of more than £30 million within West Lindsey with an expected economic impact assessed at being in excess of that.
“As with all our assets we will continually review them each year – but this is a new step for the council and we are confident this decision will be in the interests of the people our communities across West Lindsey.”