Balmer Lawn hotel in the Brockenhurst has been granted planning permission to add 38 bedrooms and expand its event space to make it the largest banqueting facility in the New Forest.
The £4m project will take the hotel's stock to 94 bedrooms, double the function room capacity to 240, improve the spa and leisure facilities and create 22 jobs.
Chris Wilson, who has owned the four-AA-silver star property with his wife Alison for 23 years, said: "We are extremely pleased that three years hard work has resulted in Balmer Lawn Hotel now being able to compete with other top New Forest properties.
"For too many years the news has been about the loss of hotel bedrooms in our fabulous destination, so it was critical this plan allowed us continue to improve the commercial viability of the hotel, the quality and scope of our guest offer and support the local community and environment on a sustainable basis."
Staff at the hotel will increase from 60 to 72 full timers, with an additional 10 team members employed during the summer as a result of the expansion, which is expected to take two to three years to complete.
General manager Michael Clitheroe, who has worked on the proposals alongside architect Steve Sherlock, said: "This application is crucial to the long-term viability of the Balmer Lawn, with ever increasing pressure from rising costs the current size of the hotel is not economically viable as a single privately owned unit. This development will secure the long-term sustainability of the hotel."
The Wilsons bought the hotel in October 1997 when it was the three-star Hilton Ladbroke and have since invested heavily in the property, which today includes a two-AA-rosette restaurant.