Of course STN are out to compete with LGW especially and to a lesser extent LHR. As they frequently quote "We want to be the best airport serving London". When the likes of Air Asia X return to London in 2018, STN are going to compete with LGW to get the service back, especially when Air Asia have said they either want Ryanair from STN or easyJet from LGW to feed their service. Also, STN dream of full service airlines, not low-cost that already overly serve the airport and Luton.
The rumours were that the hotel was being built to encourage Qatar to come to the airport by offering Business facilities. With a connection directly to Sat 1 to offer hotel check-in. That is what was said last year and it was going round in circles. Likely not to be true as most rumours are, but that was what the rumour was.