The Esplanade Hotel provided rooms overlooking Port Phillip Bay, at a time when St Kilda was both a suburb of the wealthy, and the preferred place to partake of the waters in one of the many sea-bath establishments for both Melburnians and visitors.

The Esplanade Hotel was the home of wealthy philanthropist and National Gallery of Victoria benefactor Alfred Felton from 1892 until his death in 1904.

[5] The hotel was bought by Carlton and United Breweries in 1995 and then sold to Becton Corporation in 1997 with plans to develop a large residential and retail complex on the site.

Becton's proposal for a 35 storey residential complex behind a partly retained hotel resulted in 9,000 residents registering objections and the trade union movement threatening to boycott construction if the pub was demolished.

Following some refurbishment the Gershwin Room at the rear reopened for live bands in 2004 and became home for the SBS television show Rockwiz.

They closed the hotel suddenly on 17 May 2015, with the stated intention of refurbishment, but no work happened, with only the Gershwin Room used occasionally for special gigs.

In May 2017, The Espy was sold yet again, to Melbourne-based hospitality group Sand Hill Road, who have operated and redeveloped licensed venues since 2000.