Haunted hotel guide · Port Townsend, Washington
Haunted Palace Hotel, Port Townsend: The Lady in Blue and Miss Claire's Room
An 1889 sea captain’s building on Water Street that ran as a brothel in the 1920s, where rooms are named for the women who worked there and a scrapbook holds more than 100 guests’ ghost stories.
The Palace Hotel occupies a tall brick building on Water Street in the middle of Port Townsend’s Victorian downtown. Sea captain Henry Tibbals built it in 1889, and from 1925 to 1933 it ran as a hotel and brothel known as the Palace of Sweets. Many of its rooms are still named for the women who worked there: Miss Claire, Miss Kitty, Miss Genevieve, Miss Pearl. It is one of the most popular haunted hotels in Washington, and a short walk from the waterfront.
Since 1987 the hotel has kept a scrapbook of letters and photos from guests describing their encounters, with more than 100 accounts. Most concern the Lady in Blue, whose portrait hangs at the top of the stairs, and Room 4, Miss Claire’s room. Below we cover the stories, the building’s history and how to book the room.
Palace Hotel at a glance
Haunted Rooms Score
- Address 1004 Water St, Port Townsend, WA 98368, in the downtown historic district
- Built 1889 as the Capt. Henry L. Tibbals Building; a hotel and brothel from 1925 to 1933; now a 26-room hotel
- Most haunted spots Room 4 (Miss Claire), Room 3 (Marie’s Suite), the second floor and the portrait at the top of the stairs
- Best-known ghosts The Lady in Blue, often linked to Miss Claire; the hotel is said to have about ten spirits
- Booking the haunted room Rooms are listed by number and name on the hotel’s website, so you can book Room 4, Miss Claire, by name.
- Good to know No elevator and no ground-floor rooms. Room 4 has a queen bed and a shower-only bathroom. Not every room accepts dogs. Ask to see the ghost scrapbook.
The ghosts of the Palace Hotel
The Lady in Blue
A portrait of a mournful woman in a blue dress hangs at the top of the staircase. Legend links her to the building’s brothel years, and says she leaves the painting to search the halls, mostly on the second floor, for a lover who left and never came back.
One guest, quoted by Seattle Refined in 2020, came back from dinner to find the frame still on the wall but the painting inside empty, and noticed a sweet perfume at the same time. Encounters with her are described as gentle: a cool breeze, a sudden flick of the hair.
Miss Claire and Room 4
Many believe the Lady in Blue is Miss Claire, whose name is on the door of Room 4 and who is said to have used that room when the building was a brothel. It is the room most people ask for.
Guests in Rooms 3 and 4 report shaking beds, moans and mournful cries, shadows, dreams, perfume and cold drafts. A 1996 letter in the scrapbook, from a guest named Michael from New Jersey, says he and a friend slept with the lights on all night in Room 4.
The ghost scrapbook
The hotel has collected guests’ letters and photos since 1987. In 2008, manager Gary Schweizer showed the Peninsula Daily News a file with more than 100 cases, including a 1987 letter about a spirit at the door and a 2005 letter from a couple who said a ghost touched them. During a 2005 paranormal conference in Port Townsend, a talking board session in the hotel produced a spirit who called herself Betty and said she died at 39.
Staff say they neither deny nor promote the stories. Guests are welcome to read the book, and the hotel lets visitors peek into any room whose door is open.
The other residents
Longtime housekeeping manager Cheryl Heller told the Peninsula Daily News in 2012 that she greets the ghosts as “the people of the house.” She described a small boy who gave his name as Adam, a woman in a Victorian dress seen at the top of the stairs, a former housekeeper who returns on the anniversary of her death, and a monk said to pine for one of the women who lived there. Seattle Refined put the total at possibly ten spirits.
Heller said she had never seen the Lady in Blue herself but had sensed her several times, and that guests have reported her since the 1960s. Manager Gary Schweizer told the paper the ghost reputation is “about a wash”: it draws some guests and puts off others.
Handprints on a guest's window
Writer MaryRose Denton stayed at the Palace for Seattle Refined in 2020, in Room 7. Her night was quiet apart from noises that kept her awake, but in the morning she found two white handprints on the outside of her window pane, high above the street where no one could easily reach.
The most haunted rooms and places to look
- Room 4, Miss Claire: The most requested room, on the second floor overlooking the street, with a queen bed and shower. Shaking beds, moans and perfume.
- Room 3, Marie's Suite: A premium king room with water views in two directions. Named with Room 4 for shaking beds and shadows.
- The staircase portrait: The Lady in Blue at the top of the stairs. Look at her on your way up.
- The second floor halls: Where the Lady in Blue is said to walk, searching for her lost love.
- Room 7, Miss Alice: The second-floor room where the 2020 visitor found white handprints on the outside of the window.
History of Palace Hotel
Port Townsend boomed in the late 1880s, and many of its finest buildings date from those years. Retired sea captain Henry L. Tibbals put up this building on Water Street in 1889 for about $28,000, according to the Jefferson County Historical Society. The architects were Whiteway & Schroeder.
In its early years the ground floor held a billiard parlor and three saloons, including the Townsend Tavern, with furnished rooms to rent upstairs. Over the decades the building also housed newspapers such as the Port Townsend Call and The Leader, the Townsend Theater, a state liquor store, shops and several restaurants.
From 1925 to 1933 the top two floors ran as the Palace Hotel, which was in fact a brothel nicknamed the Palace of Sweets. During Prohibition some patrons came mainly for the liquor. The historical society says the women left town after a raid in the mid-1930s, when the sheriff ordered the madam, Marie, to close and leave within a week. Room 3 still carries the name Marie’s Suite, and other doors carry the names of women said to have worked there.
The interior was restored between 1976 and 1984, and by 1988 the upper rooms were back in use as the Palace Hotel. Today it has 26 rooms across the second floor, a mezzanine and the third floor. Most are furnished in Victorian style with high ceilings, while lofted studios on the third floor are named for polar explorers and sea captains, and Room 2 is named for Captain Tibbals himself. The building sits in the Port Townsend Historic District, one of the best-preserved Victorian seaports in the country.
Tips for a haunted stay
- Book Room 4 (Miss Claire) or Room 3 (Marie’s Suite) directly by name; the hotel lists every room by number.
- Ask at the desk for the ghost scrapbook and read it before bed.
- There is no elevator and every room is upstairs, so pack light.
- Pair your stay with Manresa Castle up the hill, Port Townsend’s other famous haunted hotel.
- Port Townsend hosts ghost walks and history events around Halloween; check the local listings when you plan your trip.
Want to investigate, not just sleep?
Sleeping in a haunted hotel is one thing. Investigating one after dark is another. On a Haunted Rooms ghost hunt our team takes you through the building with professional ghost hunting equipment, runs EVP sessions and lets you explore on your own during free roam.
- Fairweather Inn Ghost Hunt & Sleepover, Virginia City, Montana: the nearest Haunted Rooms hotel sleepover
- Old Ravalli County Courthouse Ghost Hunt, Hamilton, Montana: a public ghost hunt in a historic courthouse
More haunted hotels nearby
- Manresa Castle, Port Townsend: Rooms 302 and 306 in a Victorian castle hotel up the hill
- Starrett House (Ann Starrett Mansion), Port Townsend: an 1889 mansion with a red-haired ghost
- Hotel Sorrento, Seattle: Seattle’s best-known haunted hotel
- Haunted hotels in Washington
Stayed in one of these hotels? Tell us what happened
We collect first-hand accounts from guests and add the best ones to our guides, with your first name and the date of your stay. We read every story before it’s published.
Frequently asked questions
Is the Palace Hotel in Port Townsend haunted?
It has one of the best-documented ghost reputations in Washington, with a scrapbook of more than 100 guest accounts since 1987. Most involve the Lady in Blue and Room 4.
Who is the Lady in Blue?
The woman in the portrait at the top of the stairs. She is often linked to Miss Claire, said to have worked in Room 4 when the building was a brothel, and is said to search for a lost lover.
What is the most haunted room at the Palace Hotel?
Room 4, Miss Claire. Room 3, Marie’s Suite, is also named for shaking beds and shadows.
Was the Palace Hotel a brothel?
Yes. From 1925 to 1933 the upper floors ran as a brothel nicknamed the Palace of Sweets, run by a madam named Marie, according to the Jefferson County Historical Society. Many rooms are named for the women who worked there.
Can you book Room 4 at the Palace Hotel?
Yes. The hotel lists its rooms by number and name, so you can choose Miss Claire directly.
Who built the Palace Hotel in Port Townsend?
Retired sea captain Henry L. Tibbals, in 1889. The building is still known as the Captain Tibbals Building.
Sources
Facts on this page are checked against the hotel’s own website, historic records and news coverage. Ghost stories are reported as guests, staff and local historians tell them. Read how we rate haunted hotels.
- Peninsula Daily News: Lady in Blue cuts a ghostly reputation (2008)
- Peninsula Daily News: Is The Palace Hotel haunted? Make no bones about it (2012)
- Seattle Refined: A haunting history at the Palace Hotel (2020)
- Jefferson County Historical Society: Capt. H. L. Tibbals Building
- Palace Hotel: Rooms
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About the authors
The Haunted Rooms Team runs public ghost hunts and overnight investigations at historic venues across the United States. We research every hotel in our guides using hotel histories, local archives, news coverage and the accounts of guests and staff, and we review each guide regularly so you are not booking a hotel that has closed or changed its name. Spotted something out of date? Let us know.
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