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It is expected to open in 2016.
It will house seven guests in four cabins and have huge windows for views of the Earth turning below, it said.
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The hotel, or the Commercial Space Station to give it its proper name, is due to open by 2016 and, according to those behind it, will be 'far more comfortable' than the International Space Station used by astronauts and cosmonauts, according to the paper.
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The plan is to do away with the freeze-dried tubes of nourishment given to astronauts and replace them with delicacies such as braised veal cheeks with wild mushrooms, white bean puree, potato soup and plum compote, said The Daily Mail.
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Toilets will use flowing air instead of water to move waste through the system.
Waste water will be recycled, while the air will be filtered to remove odour and bacteria and then returned to the cabin.
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"A hotel should be comfortable inside, and it will be possible to look at the Earth through large portholes.
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"The hotel will be aimed at wealthy individuals and people working for private companies who want to do research in space."
Tourists might also find themselves playing host to unexpected guests - there is a plan for the hotel to be used as an emergency bolthole for astronauts aboard the International Space Station if there is a crisis, rather than bringing them all the way back to Earth.