The original Algonquin hotel was a massive wooden Shingle Style building built in 1889 by the St. Andrews Land Company, established in 1883 by American businessmen.

Advertising proclaiming "No hay fever here" and "A general air of restfulness" attracted many wealthy tourists, some of whom established elaborate summer "cottages" in the town of St. Andrews and its surrounding countryside.

Stephen started the process which would see CPR purchase the NBR, as well as build a line across Maine from southern Quebec to connect with the rail network.

In 1888, Stephen retired and was replaced by William Cornelius Van Horne, who, on July 1, 1890, oversaw the Canadian Pacific Railway's lease of the NBR for 990 years.

Van Horne, a Montreal resident, purchased nearby Minister's Island and soon began construction of his Covenhoven estate, which still stands today.

Later that year in October 2001, Canadian Pacific Limited spun off its subsidiaries, including Fairmont Hotels and Resorts into individually controlled companies.

The hotel's guests have included heads of state and royalty such as Presidents of the United States Theodore Roosevelt, Franklin Delano Roosevelt, and Lyndon B. Johnson, British Royals HRH Prince Charles and Diana, Princess of Wales, Canadian Prime Minister John A. Macdonald, and virtually every other Prime Minister of Canada since its Confederation.

[4][5] In late 2010, the Fairmont chain asked the government of New Brunswick for a set amount of money in order to refit the property on a large scale.