The sculpture took 1,000 tonnes of sand and a team of four sculptors working 14 hours a day for seven days to build the structure on Weymouth beach, Dorset, England.
Guests can book to stay in the hotel, which includes beds made out of sand, until the rain washes it away.
The structure was created by a hotel company to celebrate a resurgence of holidaymakers flocking to the seaside.
Research by Laterooms.com predicts 37 million people will enjoy British beaches this year.
The sand hotel offers a twin and double bedroom, while the roofless structure gives guests the chance to "star-gaze" at night, the firm said.
But there are no toilet facilities and people were warned the sand "gets everywhere".
Mark Anderson, creator of the sand hotel, said: "It is the biggest sandcastle-like structure ever in the UK.
"Four of us worked hard and with the help of a JCB we got it built.
"The beds are made of sand so it can get everywhere, especially between the toes.
"But the best thing is in the morning the tide laps through the door, what a great way to wake up."
Kathy Gwinnett, of Laterooms.com, said: "It's great that British beach holidays are enjoying a renaissance and that some of the less obvious resorts, such as Weymouth and Torquay, are getting rediscovered by a younger generation."