Developer PegasusLife wants to replace the Lyndhurst Park Hotel with 74 pensioner flats.
More than 240 objections have been received during the planning consultation, many calling for affordable housing to help families.
PegasusLife said the development would have "many benefits".
It plans to replace the hotel - originally built as a private mansion house in the early 19th Century - with 74 "age restricted high quality assisted living" apartments and 12 holiday lets.
Campaigner Lisa Knight said there was "overwhelming" opposition to the plans in Lyndhurst.
She said: "Our young people are being priced out. We need affordable housing for young families to bring some vibrancy into the village and help the businesses that are struggling.
"Our facilities like Scouts, the Brownies and the football team will all go if we don't encourage young people to be able to live here."
Among the objections published on the New Forest National Park (NPA) planning website, one said the village would become "one large old peoples home", another stated "the village does not need yet more age restricted residential units".
In a statement, the developer said: "PegasusLife firmly believes its proposals for the hotel will enhance the site and provide many benefits for the village and people of Lyndhurst.
"The proposals have evolved as a result of our engagement with the local community as well as an assessment in line with planning policy."
The company's application stated that as an "assisted living" development, it was not required to provide affordable housing.
Among the public comments in favour of the development, one said the building was a "blot on the landscape".
The development is due to be discussed by the NPA in the coming months.
Plans to demolish a New Forest hotel to build retirement homes could add to housing pressures facing younger families, campaigners have said.