Engineers sank a borehole under the hotel, which is close to the Atlantic Ocean, allowing for up to 11,500l of seawater an hour to be pumped into tanks.
The reverse-osmosis plant treats 7,000l an hour, which is pumped into a 70,000l fresh- water tank.
"Using a desalination plant allows us to operate completely off the municipal water supply," said hotel general manager Clinton Thom.
A year ago, Cape Town was only weeks away from "Day Zero" - when taps would have been turned off - after three winters of low rainfall. The city council constructed three temporary desalination plants - in Strandfontein, Monwabisi and the V&A Waterfront.
Dams are now around half full. Four months ago, water restrictions were relaxed from level 5 to level 3.
Enver Duminy, CEO of Cape Town Tourism, said: "Only 1% of people in the Western Cape at any one time are comprised of overseas tourists and visitors, but it's essential that the tourism industry leads the way in sustainable practices."