The Palace Hotel in Port Townsend, Washington, was originally built in 1889 by retired sea captain Henry L. Tibbals. The Victorian building initially cost $28,000, housed multiple businesses: For its first few decades, the first floor of the building housed a billiard parlor, saloons, and other businesses. The upper floors were used for rented rooms. The ground floor was home to various specialty retailers over the years, including the Port Townsend Call newspaper, the Townsend Theater, a state liquor store, and multiple restaurants.
The building has served many purposes over the years, most notably as a brothel known as the “Palace of Sweets” from 1925-1933. Managed by a Madam: Marie, the madam, lived in the corner suite on the second floor. The building is rumored to be haunted by the women who worked there. After falling into disrepair, it was restored in the late 1970s and early 1980s and re-opened as the Palace Hotel.
The rooms were named after the women who worked in the former brothel. After 20 years of ownership, John Gair sold the hotel in 2022 to new Washington-based owners with experience in local business and hospitality.
The Palace Hotel in Port Townsend, Washington, is reported to be haunted by several spirits, most famously the “Lady in Blue,” a former brothel madam also called “Miss Claire”. Guests report a variety of paranormal activity, including the smell of perfume, unexplained noises, and feeling touched by unseen hands. Other alleged spirits include the hotel’s builder, Captain Tibbals, a boy named Adam, and a family who may have died in a fire. Specific paranormal reports, The Lady in Blue (Miss Claire): She is said to haunt rooms 3 and 4, with guests reporting the scent of perfume, shaking beds, ghostly moans, and a cold draft. She has been seen at the top of the stairs and is also reported to have a portrait near the staircase.
Captain Tibbals: The spirit of the hotel’s original builder is believed to be seen in the halls. Adam: A friendly spirit of a young boy who runs through the hallways. Other spirits: A woman in a black dress who appears near the kitchen stove. A sinister shadowy figure that stalks the hallways. A young Indian mother and her children who are believed to have died in a fire. A former housekeeper who makes a yearly appearance. A homeless man who used to sleep in the basement. General activity: Encounters with solid, life-like entities dressed in Victorian clothing. Being touched by unseen hands. Orbs captured on film in various locations. Doors opening or closing on their own.
The Palace Hotel in Port Townsend is considered haunted, with reports of various paranormal activities and several named spirits.
Check out our Evidence Locker