FREDERICK Boss, manager of the former Palace Hotel on Nanjing Road, said in June 1933, that “Shanghai hotel guests are the most cosmopolitan in the world.”

“People of all walks of life, all nationalities, all creeds, pass through Shanghai. Nowhere, not even in London or Paris, is there such a distinctly international hotel patronage,” Boss, who until then had worked in the hotel for seven years, has been quoted as saying.

Widely known for decades as the Peace Hotel South Building, the red-and-white brick hotel has a much longer history than Peace Hotel, which opened in 1929 as Sassoon House on Nanjing Road. Designed by British architect Walter Scott and opened in 1908, the Palace Hotel was constructed on the site of the even older Central Hotel, which was built in 1875.

“When renovation plans for the hotel were released, the hotel board was so thrilled that they decided to change the name, the Central Hotel, to the Palace Hotel,” says Tongji University Professor Qian Zonghao, who is the author of the book “The Historical Change of Architecture and Scenes on the Bund.”

“However, the Chinese name — Hui Zhong Fandian — was retained given the Chinese people’s preference for old names. When the new Palace Hotel finally opened, the 90-foot (27-meter) building was the tallest on the Bund,” he says.

The hotel lived up to its new name and did look like a palace straight out of fairy tales. A variety of different window shapes were created for different floors, including semi-circular arches, diminished arches and pointed arches. The grand entrance on Nanjing Road E. had exquisite carvings and a revolving door.

As one of the largest, tallest and most spacious hotels in China, the Palace Hotel had 120 rooms, spacious dining area and banquet hall besides a famous roof garden. It had the city’s first elevator — an Otis elevator.

Soon it became a popular watering hole of China’s creme de la creme.

It was the venue for the 1909 International Opium Commission meeting, marking the first step against opium trade. In 1911, Dr Sun Yat-sen hosted a banquet here to celebrate his victory in the presidential election. Kuomintang leader Chiang Kai-shek and his wife Soong Mei-ling held their engagement reception on the top floor in 1927.

“Shanghai’s hotels are second to none in the world. They are modern, efficient and comfortable. Modern sanitation, central heating and airy rooms with baths are to be found in every large Shanghai hotel. The average guest who puts up at a Shanghai hotel pays from US$12 to US$15 for a room with meals,” Palace Hotel manager Boss said in 1933.

In its prime, the hotel was also known for its elaborate roof garden, with a Baroque tower, a pair of cupolas and artificial lawn. Green vines wound around the railings.

“It was the first roof garden that offered a bird’s-eye view of the city as well as the countryside opposite the Huangpu River,” says Professor Qian.

“While sipping a glass of whisky on ice, customers could admire the music from the Municipal Orchestra concerts in the Public Garden on summer weekends. The music was clear and almost filtered out the street noise. On a winter afternoon, they could drink hot coffee under warm sunlight while appreciating the river scene.”

Unfortunately, a fire on the rooftop on August 15, 1912 changed the fate of the hotel. According to the North China Daily News, the fire broke out in the northwest corner of the roof in the ornamental cupola and raged for more than an hour.

Professor Qian says after the fire the hotel lost its clientele to a new building nearby — the Astor House Hotel. In the late 1910s, the Palace Hotel had some good times but faced strong competition from modern “skyscraper” hotels in the 1920s, such as the neighboring Cathay Hotel and the Park Hotel, both on Nanjing Road.

According to the Huangpu District Archives, the building was occupied by the Japanese during World War II and used by several state-owned organizations after 1949. In 1965, it reopened as the Peace Hotel South Building. This history-rich hotel lost some of its shine after becoming the South Building of the Peace Hotel.

The past glory of the Palace Hotel was almost forgotten, but a renovation in 2010 transformed this historical building into the new-concept Swatch Art Peace Hotel.

The ground and first floors feature flagship shops of the Swatch Group and a spacious hall showcasing exhibitions. The top three floors were turned into a luxury boutique hotel with large, creatively designed suites and chic restaurants.

The middle two floors are used for an Artist in Residence program. According to René Lorenceau, the hotel’s CEO, more than 250 artists from 45 countries and regions have been invited to live and work at the Swatch Art Peace Hotel since its opening in 2011.

They get a room or a studio of different dimensions — from 32 square meters (ideally used by a writer) to 89 square meters (a dancing studio or for artists developing big formats).

“We only ask them to leave us a ‘trace’ of their stay at the Swatch Art Peace Hotel.

What is a “trace?”

“We have not defined it. In most cases, the guest artists leave us an artwork,” says Lorenceau.

Now the hotel has up to 300 “traces”’ and 50 donated pieces in its collection.

“The ‘trace’ collection is a beautiful mirror of the diversity of creations today — photographs, film, drawing, painting, text, music, comics,” he says.

Lorenceau says some artists have drawn inspiration from the location of this hotel, such as German artist Cristina Ohlmer, whose “trace” is a view of Nanjing Road E. from her workshop window.

The 2010 renovation changed the layout but retained the dark-toned wooden staircase. The original interior gray-brick walls and columns are exposed. The famous roof garden opens for several months in a year. The building still bears the inscription “1906” above the main entrance on Nanjing Road — 1906 being the scheduled completion date.

American artist Alex Carroll, who is now a resident of the hotel under the program, regularly walks up and down Nanjing Road to take photos of people that act as inspiration for his paintings.

“The photographs are blurred because people move fast and there are so many people on this road. I open up the shutter speed of my camera, snap away and try to catch the movement of the crowd,” Carroll says, describing his “sketching tour” of this cosmopolitan street.

“The action, the crowd ... there’s a lot of energy to get inspiration — from seeing the old buildings, the landscape, modern buildings and all the actions on this busy Nanjing Road,” he says.

Yesterday: The Palace Hotel

Present: The Swatch Art Peace Hotel

Address: 19 Zhongshan Rd E1 (with gate on Nanjing Rd)

Date of completion: In 1908

Architect: Walter Scott

Architectural style: Victorian colonial

Tips: The hotel is partially open to the public. I would recommend climbing the antique staircase to appreciate the exhibition room featuring exposed original walls and columns.