CCTV footage revealed the Grosvenor House Hotel in North Parade was open in contravention of the government closure order, which began on November 4.
At one point 15 customers were crammed in the bar area, with no social distancing and without masks being worn by customers or staff, according to Lincolnshire Police.
Owner Russ Sparkes told an East Lindsey District Council's licence review no alcohol sales had taken place, and that “the people in the bar area were permanent residents at the hotel who formed part of his social bubble”.
He also denied other guests or workmen were permitted in the bar.
However, the Alcohol Licensing Team, following a visit to the premises on November 19, said CCTV footage found the hotel to be open and trading on Friday, November 13, and Saturday, November 14.
Customers were seen inside consuming alcohol in contravention of the government closure order, they said.
On Tuesday, January 19, a digital hearing was held in front of Skegness District Council Licensing Sub-Committee. After hearing all the evidence they agreed with the police that this licensed premises had opened in breach of the regulations when other businesses were subject to closure.
The Sub-Committee were of the view that the breaches were so serious in a time when coronavirus was particularly prevalent in the area and when the Government had declared a national lockdown for the country that it was appropriate for the promotion of all four of the licensing objectives to revoke the licence.
Lincolnshire Police initially received a photograph from a Facebook account which appeared to show a group of males sat in a large group drinking pints and posing for photos.
Sgt Kim Enderby, Alcohol Licensing Manager for Lincolnshire Police, said: “Following that initial Facebook image being sent to my team we carried out a thorough investigation.
"We quickly attended at the hotel and carried out a review of the CCTV hard drive. I thought after 29 years in the police there wasn’t a lot left to shock me but the way in which this venue was operating was awful.
"Nearly two weeks after the November lockdown had started we found footage of over 15 people in the bar area.
"They were being served pint after pint by the owner of the premises Mr Russ Sparks.
"Obviously this hotel bar should have been closed; people should not have been allowed inside to drink alcohol.
"But of equal concern was the total lack of social distancing measures in place. At one point over 10 men were crammed round a small table drinking and posing for what we think were the Facebook posts.
"There were no face masks being worn by customers or staff, nothing had been put in place to try and prevent the spread of the virus.
"We also discovered footage of three males smoking in the bar area, despite the fact that it has been illegal to smoke on licensed premises in England since 1st July 2007- over thirteen years.
"The males were seen to be drinking and smoking whilst children sat and ate at a table behind them.
"Mr Sparks claimed it was an error of judgement on his part to open the bar but that is a poor excuse. The blatant disregard for both the closure order and social distancing measures demonstrates a lack of management and control over these premises.
"We are not yet out of this pandemic, whilst the vaccine rollout is well under way, we still need everyone to be sensible and follow the regulations. Anyone responsible for running licensed premises is expected to do so responsibly and within the law.
"The decision of East Lindsey District Council to revoke this licence sends a really strong deterrent message to anyone owning or running licensed premises.
"They need to follow the guidance, operate lawfully and responsibly. We will not hesitate to take action against any licensed premises whose operation presents a risk to the public, where there is criminality and where the licensing objectives are undermined.”
There is a 21-day appeal process. If no appeal is submitted then the suspension comes into force.
Built in 1922 by the Spencer family, the Grosvenor House Hotel has stood strong as a cornerstone of Skegness tourism for almost a century. The Spencers owned the hotel for 5 generations and in recent years still employed a great, great grandson of the builder.
The hotel has 29 bedrooms, all rooms en-suite, bedrooms are mainly family suite.
It has the largest maple sprung dance floor in Lincolnshire ideal for Ballroom to Rock ‘n’ Roll. EDC Dance Group was also based there for five years and sponsored by the hotel.
The ballroom has also hosted the Christmas 'Feed the 1000' meals for the elderly and homeless.
Mr Sparkes was unable to comment about the hotel's future at this time.