North Devon Council has approved plans for a 16-bedroom expansion of Highbullen Hotel Golf and Country Club and 58 new holiday lodges.
The lodges will be built on the golf course fairways, meaning the course will be shortened to nine holes.
Hotel owner Frank Chapman told councillors that he had spent almost £9m on regenerating the site since buying it in 2012, and needed the lodges to keep the award-winning business viable.