The Anglo-Norman castle was originally built in the 12th Century by John De Courcy.
At one stage it was virtually a ruin but was restored in the 19th century and further renovated in recent years.
The application is for an eight bedroom hotel with permission to use a courtyard for events such as weddings.
A community consultation report submitted with the application says the hotel might be more accurately described as "a private venue which could be hired on request".
The application is made in the name of Mullahead Property Company Ltd, a firm associated with the owners of the Tayto crisp brand.
It adds that Tayto also intend to use the venue for visiting customers and for training and conference purposes.
The owners of Quintin Castle near Portaferry have applied for planning permission to convert it to a boutique hotel.