Yes this is an accepted practice.
What your boss is doing is providing a per diem. Or a per day reinbursement for travel expenses. His choice of paying for the hotel room and an allowance for meals is very common for those who travel more than 50+ miles to a job site. It is also common to have a limit oer day on meals costs.
The idea is that you do not have to drive for extended periods of time to get to work and go to a place where you sleep.
For many traveling workers this is a very common way of taking care of travel/ lodging/meal costs while away from home.
