The trust has applied for resource consent to demolish four buildings in Gore St that make up the hotel, a category 2 heritage building on Heritage New Zealand Pouhere Taonga's list.
The site is also recorded as being of heritage value in the Invercargill district plan.
The hearing panel, due to meet on April 17, will be chaired by commissioner Peter Constantine, at the Invercargill City Council.
Three submissions oppose the application.
Festival trust member Kylie Fowler said the trust bought the building in 2014 and had made "numerous attempts'' - unsuccessfully - to sell the hotel.
"We feel that we have done our best to find someone else to take the property.''
Heritage NZ had also advertised, but to no avail.
Previous estimates to bring the hotel to current building standards exceeded $1 million, making it unviable, Ms Fowler said.
"We don't have the funds.''
Ms Fowler said the trust planned to incorporate the vacant land into the site that was used as the venue for the annual Bluff Oyster and Seafood Festival.
She said the festival site accommodated up to 5000 people but the demand for tickets to the event was higher and they sold out months in advance.
"If we get the resource consent approved, we can make extra space for the festival in 2020.''
In the trust's application, planning consultant Gareth Clarke said the land would be built up to match the ground level of the festival site, and its frontage would be developed with a terraced garden and public access.
The Invercargill City Council provided $100,000 to the trust towards the cost of the land purchase and redevelopment of the site in 2014.
Bluff resident and tourist operator Cherie Chapman plans to speak during the hearing next week.
In her submission, she said the Club Hotel was a "key historical building'' and the decision to demolish it would be ``premature and short-sighted''.
She has also raised concerns community consultation was insufficient, and suggested keeping the hotel facade.
"If the Club Hotel must be pulled down, then it is important the current design incorporates some of the architectural elements of the hotel.''
Council planning manager Terence Boylan said it was expected the hearing would conclude within a day.
"However, it will be up to the hearings commissioner to make any decisions regarding this as they consider all information provided.''
