Televisions and a lift were among items wrecked at Newport Central Hotel, said Na'im Payman, who runs a firm that manages it.

Gwent Police said a man was arrested on suspicion of criminal damage.

Newport council said the homeless people had since been given alternative accommodation.

It came after the hotel closed on 13 August because of a problem with fire regulations.

The council said people had been housed at Newport Central Hotel over the past 12 months, including, more recently, "a number of rough sleepers".

Mr Payman said about one floor had been used by homeless residents - about 16 rooms of the 61 room property.

He said the damage caused had impacted on their ability to take other people in.

"It will cost us tens of thousands of pounds," Mr Payman said. "We have made a loss by housing them."

'It's been a nightmare'

Sam Dabb, who runs nearby Le Pub, said 98% of the homeless people staying at the hotel on Newport's High Street were "amazing".

"But 2% have been a nightmare, fighting, stealing, doing drugs, threatening people. What they should have done was just kick out the 2%," she said.

"It's been a nightmare constantly having to police outside. You did not know what they might be getting up to."

She said after the hotel was closed down "about 12" homeless people returned to the property to squat. She said they had left by Friday.

"They were just coming and going, they had the door open," she said.

Recent reviews of the hotel on Trip Advisor were unflattering.

One writer, Kendal Smith, said staff were "lovely" but warned of "drug addicts."

"It's awful and not safe, the homeless that stay here take drugs and abuse staff."

The author warned guests' doors were kicked, adding: "Do not stay here!"

Claire Crook said it was "too dangerous to ever go near again."

"When I arrived, I was confronted by a drunken brawl outside the hotel entrance and had to call the police as a woman with blood pouring from her head was lying on the floor," said the writer.

She called it the "worst hotel experience of my entire life."

A third, Ben W, said it was a "dangerous place for a family to stay."

Mr Payman apologised to guests, staff and nearby residents for "extreme discomfort" caused by some residents.

"At the same time we hope it will be appreciated that it is completely beyond our control as accommodation providers to resolve long-standing and complex behavioural patterns," he said.

'Breakages and damage'

Newport council said all residents it had housed at the hotel were moved to alternative accommodation by 15 August, "following instructions from South Wales Fire and Rescue Service," it said.

"Any issues relating to breakages and damages within the hotel, where caused by an individual placed there by the council, have been addressed," a council spokesman said.

Gwent Police said it was called to the hotel at 14:30 BST on 10 July following a report of criminal damage.

A spokesman said: "A 24-year-old man from Newport was arrested on suspicion of criminal damage and has been released under investigation."