The Stromness Hotel will not sell alcohol at the bar, but will allow customers to bring their own drinks to private functions, such as weddings and office Christmas parties.
Na'ím Anís Paymán, chief executive of Paymán Investments, which runs a number of hotels throughout the UK, said massages, hot tubs and vegan and vegetarian eating options would soon be on offer at Stromness with flower and herbal-based drinks also going on the menu.
The Flattie Bar, which forms part of the hotel building, is set to be “reconfigured,” he told BBC Radio Orkney on Friday.
Mr Paymán later wrote on social media: “Selling alcohol is actually extremely profitable. But it is a major negative contributing factor to the physical and mental wellbeing of a large proportion of society. If I can save one life, I'd rather take the financial hit.”
Confirmation of the new alcohol policy has been met with a mixed response, with the new direction of the hotel and the investment in the building welcomed by some.
One Kirkwall woman said on social media: “Well done for stepping in and saving a building that was otherwise going to end up in a ruinous state.
"A spa hotel in Orkney WOW. In my experience alcohol doesn’t keep a roof over a hotel’s head, so I understand and appreciate this innovative move.”
Another wrote: “Wishing you good luck for the future. It will be nice to see it upgraded. It’s nice to see somebody trying to keep the street alive.”
Others questioned the changes to the alcohol policy and the Flattie Bar.
"Who is going to book a wedding at a hotel that doesn't sell alcohol?” one user wrote.
"And if they did, can you imagine the carnage if everyone turns up with a litre bottle of spirits and is pouring house drams for the evening.”
The hotel will still hold events during Orkney Folk Festival, Mr Paymán confirmed.
One Facebook user wrote: “The visiting bands are drawn by the great party atmosphere, which is legendary, and historically the Stromness Hotel was the heart of it. And beer was the fuel.”
Mr Paymán said he was in the process of closing deals on three other hotels “not too far from Orkney” with a number of premises recently acquired throughout England.
He said: “We were affected by the pandemic like other hospitality businesses. I know some people on the island feel we are a big multi-national corporate that is coming in and buying a local hotel, which is far from the truth.
"Our business was struggling at the start of the pandemic and we had to reinvent ourselves to see how we could make ends meet.
"For me, keeping staff in jobs has been a massive priority both for staff … and we tried to keep the hotel open and trading throughout the year to insure job stability for everyone who is part of the team.
"So that just involved looking at how we could expand the business without creating too much risk. I was very lucky to be able to find enough funding to acquire these sites.”