[1] The hotel declined in the 1990s, when new hotels—nearer the harbour—opened in the city, and the Kings Cross neighbourhood near the Sebel Townhouse "become more sleazy".

[1][2] Notable guests include Lauren Bacall, David Bowie, the Clash, the Harlem Globetrotters, Malcolm McLaren, the Moody Blues, and Rod Stewart.

[1][3] Dire Straits stayed at the Sebel Townhouse, the band's guitarist John Illsley writing the hotel was "colorful and edgy", and "the discretion of the staff is one of the reasons why it is so loved by the more untamed celebrities".

[citation needed] It was also the official hotel sponsor for all the cast and crew members who work on television variety shows including Countdown (1975-1987) and Hey Hey It's Saturday (1984-1987), when they did live shows in Sydney.

In 1984, the hotel hosted the wedding reception of Elton John and Renate Blauel.