Bermuda had gained international recognition in 1883 when Princess Louise, the fourth daughter of Queen Victoria, visited for a winter retreat and called it a place of eternal spring.

Many other early travellers to Bermuda were wealthy businessmen and political figures, with their families, drawn partly by the colony's reputation for a healthy climate, especially during the winter months, and also by a pace of life that was a suitable tonic for the stress and hectic pressures they experienced at home.

Bermuda's tourism had arisen without conscious planning, and the hotels previously available to the wealthy visitors who pioneered holidaying on the island were generally small and uninspiring.

With long shady verandas and a blue slate roof, the four-story building comprised 70 rooms, each equipped with gas lights, hot and cold running water and a five-inch mirror to allow guests to primp before stepping out for the night.

Mark Twain, a regular at the hotel, loved to smoke cigars on the veranda and wartime guest Ian Fleming is said to have used its fish tank-lined Gazebo Bar as a motif in his novel, Dr. No.

[9] Rumor has it that it was nicknamed 'Bletchley-in-the-Tropics' after the English country house where the Enigma code was broken (Sir William Stephenson, the Canadian-born British spymaster who was the subject of the book and film A Man Called Intrepid resided for a time at the Princess, following the war, before buying a home on the island, and was often visited there by his former subordinate, James Bond novelist Ian Fleming).

With BSC working closely with the FBI, the censors were responsible for the discovery and arrest of a number of Axis spies operating in the US, including the Joe K ring.

The censor working on the Joe K correspondence was Nadya Gardner who conducted chemical tests and found secret writing in some letters, according to historian H. Montgomery Hyde.

Although air service to Bermuda began in 1937, two years before the declaration of war, the flying boats that operated to Darrell's Island were few, and their seats were limited.

Holidaying in Bermuda (catering to which, for hoteliers, had expanded into a year-round business, no longer focused on the original Winter season) remained a prerogative of the wealthy.

This led to larger numbers of air arrivals, and falling ticket prices, opening Bermuda to short-term holidays by the average American family.

The Princess was able to cater to a degree to these new holidaymakers with a cottage colony of its own on the headland at the Pitt's Bay side of the hotel, which had formerly been the site of the Bermuda Coal Company's wharf.

[15] Although replaced by a new Bermudiana Hotel, the long decline of Bermuda's visitor industry led to its closure (it was sold in 1993 and levelled, the site being redeveloped as office space, including the ACE and XL buildings).

Affluent neighbours of the hotel objected to the original plans to match the height of the existing structure, and approval was granted only for the resulting three-storey wing.

The Princess Hotels Group passed to Tiny Rowland's British conglomerate, Lonrho Plc (originally the London and Rhodesian Mining and Land Company Limited), between 1979 and 1981 for US$200 million.