Founded in 1999 in Seattle, it operates hotels Internationally in 4 continents, with locations in; Brooklyn, New York City; Palm Springs, California; Seattle, Washington; Kyoto, Japan; Toronto, Canada; and Sydney, Australia with hotels soon to open in Athens, Greece and Fukuoka, Japan.

Friends Alex Calderwood, Wade Weigel, and Doug Herrick purchased and transformed a Seattle halfway house into an affordable hotel that would appeal to the creative class.

Calderwood and Weigel had previously founded Rudy's, a reinvigorated traditional barbershop concept they started in Seattle, which eventually expanded to more than a dozen locations, along with an experiential marketing company known as Neverstop, and an audiovisual arts platform known as ARO.Space with Pearl Jam co-founder Stone Gossard and Kung Faux creator Mic Neumann, who is credited for bringing in such artists as Kaws and Shepard Fairey to decorate the walls of various Rudy's and Ace Hotel locations.

[1] In 2006, the group opened a second hotel in Portland, Oregon followed by properties in Palm Springs, California and New York City in 2009.

[20] Bon Iver makes a reference to the Ace Hotel Los Angeles in the song "33 "GOD"" on the album 22, A Million.