Snoozebox has been granted permanent planning permission to erect its pop-up hotel each TT.
The Isle of Man Government has approved a planning application for a maximum of 240 hotel bedrooms.
This year the company will build a 160 bedroom unit just behind the Grandstand.
The Department of Economic Development has welcomed the decision saying it helps to alleviate the lack of accommodation for the 40,000 TT visitors.
Head of tourism Angela Byrne says the demand for the venture has been proved:
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