Protesters held placards and shouted outside a hotel amid potential plans to house asylum seekers there.
Dozens of people stood by the Chichester Park Hotel, on the outskirts of the city, chanting and holding signs after it was announced that the Home Office could use the hotel.
Passersby also reported seeing a group of people on the other side of the road with banners welcoming refugees and asylum seekers.
Plans are being considered which would see it handed over to a third party for 18 months with the hotel cancelling or moving nearly 1,000 bookings as a result.
The large group of protesters gathered this weekend with police attending to manage the crowds.
The hotel will officially close from today with third party contractor Fairer Places Ltd leasing the site.
The Home Office plans come months after concerns for young asylum seekers who went missing from hotels in Brighton and Hove.
Chichester MP Gillian Keegan said she was “concerned” about the plans and had been in touch with the Home Office.
A Home Office spokesman refused to confirm or deny the plans that the hotel would be used for asylum seekers.
He said: “The number of people arriving in the UK who require accommodation has reached record levels and has put our asylum system under incredible strain.
“We have been clear that the use of hotels to house asylum seekers is unacceptable – there are currently more than 51,000 asylum seekers in hotels costing the UK taxpayer £6 million a day.
“The Home Office is committed to making every effort to reduce hotel use and limit the burden on the taxpayer.”
In a joint statement, Chichester District Council and West Sussex County Council said: “A hotel in the Chichester area is being considered for use as contingency accommodation for people seeking asylum.
“Decisions around use of hotels and placements for those seeking asylum are made by the Home Office. We are not involved in the decision-making process.
“Should members of the public wish to contact the Home Office directly they can be contacted on email@example.com or by calling 0207 035 4848.”