The first section of the hotel was built in 1902 by HJ Whitley who was eager to sell residential lots among the lemon ranches then lining the foothills of the Santa Monica Mountains and opened in December of that year. Flanking the west side of Highland Avenue, the small stucco structure fronted on a dusty, unpaved road with pepper trees that would eventually become Hollywood Boulevard. HJ was instrumental in the completion of the boulevard. Within less than three years HJ would be compelled to build an additional wing onto this elegant hotel. The first forty-room wing of the hotel was just completed when HJ was determined it was time to expand. He began construction of an additional 104 rooms and the work would continue for the next three years. He enlarged it to cover the entire block, installing a wide lobby, a chapel, a music room, the famous ballroom and 125 guest rooms. Whitley surrounded the hotel with wide lawns and carefully cultivated gardens, stretching over 3 acres (12,000 m2). He operated the establishment as a resort hotel while the tiny community of Hollywood struggled to live.
Soon after the Hollywood Hotel was opened, an eccentric millionaire spinster from Iowa, Almira Hershey, who was then staying in a hotel at Grand Avenue and 4th Street in Los Angeles, rode out to see the new hotel in Hollywood that was being advertised in the L.A. Times. She then became a guest; lured, the legend goes, by the cuisine, particularly the apple pie. She fell in love with the hotel and bought shares, eventually becoming sole owner.
In 1911, Al Christie opened the first movie studio in Hollywood for David Horsley at Sunset Boulevard and Gower Street. They had filmed their first motion picture at the Whitley's home on the corner of Hollywood Boulevard and Wilcox. Other studios followed. The fame of the Hollywood Hotel, like that of Hollywood, came from its identity with the people of motion pictures. Giants of the industry first stayed at the hotel, such as Jesse Lasky, Carl Laemmle, Louis B. Mayer, Harry Warner and Irving Thalberg. Producers, directors, writers and technicians held conferences on the broad verandahs.
And there was a continuous stream of the idols of the silver screen arriving daily. Many of the great silent movie stars made their homes in the Hollywood Hotel and attended the dances held every Thursday night in the ballroom. It was considered "the" place to be seen. To identify where certain people regularly sat and dined, the hotel had stars with the names of celebrities painted on the ceiling above their tables.
Among the scores of movie stars who stayed at the Hollywood Hotel through the years was Rudolph Valentino, who lived in room 264; he met his first wife, Jean Acker, in the hotel; they were married there in 1919 and spent their honeymoon in his room. Other stars included Norma Shearer and Alla Nazimova.
Mira Hershey died in 1930. In the early 1940s, developers acquired all the stock of the Good Hope Company, which then owned the historic hotel. They wanted to tear it down and redevelop the block, but were halted because of World War II, having to wait until the release of building materials. By the 1950s, the hotel was run down and faded, only a relic of its former glory. The developers were adamant that renovating and restoring the property was out of the question.
Though the Hollywood Hotel housed many of the great stars in its day, it was razed in August 1956 to make way for a $10,000,000 development, with a twelve story office building for the First Federal Savings & Loan Association of Hollywood, a shopping center and parking lots.