Building work to extend the Premier Inn in Bispham looks set to be completed before the end of this year.
The scheme, which was granted planning permission by the council in August last year, will see 26 new bedrooms added to the premises which are attached to the Red Lion on Devonshire Road.
Once completed, the hotel will have 93 rooms in total.
Whitbread, which owns the Premier Inn brand, said it wanted to extend the hotel because it is trading well and has above-average occupancy rates.
It is not yet known when the extension will open, but the existing Premier Inn has operated as usual throughout the construction period.
The new building has been designed by architects to complement the existing bedroom block.
David Christmas, project and programme manager at Whitbread, said: “The building works are progressing well, and we are looking forward to being able to welcome even more guests to this hotel when the extension opens.
“This is a popular hotel, and these additional rooms will help us to meet increasing customer demand.”
The Devonshire Road Premier Inn is one of four hotels which the chain operates in Blackpool.
The others are at Yeadon Way, on the airport site Squires Gate Lane and on Whitehills Park at Preston New Road.
Planning permission has also been in place since 2015 for a 150-bedroom hotel on the vacant Yates’s site in Talbot Square.
Work was expected to begin last year after councillors approved a £7m six-storey scheme which also includes a Brewers Fayre restaurant on the ground floor. However the scheme has since stalled.