David Broad of the Fawlty Towers Resort said the hotel was on the brink of shuttering its doors when it reopened May 1 as the city's only clothing-optional resort, Florida Today reported Friday.
Nude men and women lounge around the hotel grounds and swim in the pool, the report said.
Broad said the no-clothing option caused weekend business to pick up significantly and the hotel is no longer on the verge of closing.
Some people said they were unhappy with the hotel's new policy.
Debra Key, a Cocoa Beach resident who is involved in Girl Scouts, complained to commissioners that Fawlty Towers could corrupt children's minds and attract prostitution.
"It doesn't stay behind closed doors. The type of perversion that comes to these places -- they bring the drugs along with it, the sexual promiscuity," Key said.
No action was taken against the hotel after City Attorney Skip Fowler determined it was not violating any laws.