Haunted hotel guide · Eureka Springs, Arkansas

The Palace Hotel & Bath House, Eureka Springs: The Madame, Room 5 and a 1901 Limestone Castle

The little limestone castle on Spring Street has been a hotel and bath house since 1901. It does not sell itself on ghosts, but the town tells a few stories about it, most of them about the years when it is said to have been a brothel.

By The Haunted Rooms Team · Updated November 2026 · How we rate hotels

2.2/5Haunted Rooms Score

1901Hotel and bath house opened

8Victorian suites today

Visit hotel website Meet the ghosts

Walk up Spring Street from the Basin Park Hotel and you cannot miss the Palace: a narrow front of rough-cut limestone, a great arched doorway, a metal dome on top and a tall neon sign running down the facade. It opened in 1901 as a hotel with its own bath house, and it is now the only one of Eureka Springs’ historic bath houses still in business. Upstairs are eight Victorian suites with whirlpool tubs for two; three floors down, cut into the hillside, is the spa.

Its ghost stories are a small part of the picture, and we want to be honest about that. The hotel does not promote them, and the few accounts in print are second hand. Local lore says the Palace was once a brothel, and the stories that circulate are about a madame who still wants her fee and a woman said to have died in Room 5. If you want a historic, romantic stay in the middle of one of the most haunted small towns in America, it is a lovely choice; if you want a hotel that tells you its ghost stories itself, book the 1886 Crescent Hotel or the Basin Park Hotel.

Palace Hotel at a glance

2.2/5
Haunted Rooms Score

Haunted reputation2

History4

Ghost hunter access1

$$ · $150 to $300

Address 135 Spring Street, Eureka Springs, AR 72632
Opened Built in 1900 and opened in 1901 as a hotel and bath house
Most haunted spots Room 5 and the upstairs hall, according to local lore
Best-known ghosts A madame from the building’s rumored brothel years, a working woman said to have been killed in Room 5, and a child
Booking the haunted room The Palace does not market a haunted room. You can ask about Suite 5 when you call, but it is a request, not a promise.
Good to know Book the hotel and the spa separately; the bath house treatments are the reason most guests come. The hotel is on a steep street, so plan on a short climb with luggage.

Visit hotel website

The ghosts of Palace Hotel & Bath House

The madame who wants her fee

The story most often told about the Palace comes from a guest account collected by the travel site Haunted Excursions. A couple staying at the hotel were, as the account puts it, getting frisky one night when someone gave their door a loud bang. The woman went to the door at once and found the hallway empty.

She decided, half joking, that it was the madame from the building’s brothel days, annoyed that she had not been paid up front. It is a funny story and a very Eureka Springs one. The same writer is careful to say that the hotel does not boast about hauntings and that little else has been reported, so read it as one guest’s experience rather than a pattern.

The woman in Room 5

The darker version of the Palace legend appeared in 2025, in a reader comment on The Beth Lists, a travel blog whose author had stayed at the hotel. The commenter said that one of the working women was murdered in Room 5, that she often appears there, and that guests smell cigarette smoke and perfume when she does. He added that a former owner had kept old newspaper clippings about the brothel and the deaths.

We have not been able to find those clippings or any record of a killing at the Palace, and the blog’s author did not confirm the claims. She replied that haunting stories in historic hotels are a mix of tall tales and incidents that can be checked in old newspapers. Until someone produces the clipping, Room 5 belongs in the tall-tale column.

The child downstairs

The same commenter said that when the building was a brothel, the women’s children were kept downstairs, and that one child who died there is now the most active presence in the hotel. Nothing in the hotel’s published history mentions children living in the building, and no names or dates come with the story.

The lower levels of the Palace are where the bath house has been since 1901, three flights below the main hotel floor and built into the hill. Guests who come for a soak at night describe it as quiet and atmospheric rather than frightening.

Was the Palace really a brothel?

Eureka Springs locals have long said so, and the shape of the neon sign has given the town a cheeky nickname for the place. The Beth Lists author heard the brothel story from people in town after her stay. The town’s own history pages and the architectural survey of the building, though, describe it only as a hotel and bath house, with a barber shop, cafe and laundry advertised in the early 1900s.

So the safest way to put it is that the brothel years are a local tradition rather than a documented fact. That is also true of the hotel’s ghosts, which grew out of that tradition.

The most haunted rooms and places to look

Room 5: The room named in the 2025 account of a murdered working woman. Rooms at the Palace are suites with whirlpool tubs, so it is a comfortable room either way; ask about it when you call.
The upstairs hall: Where the madame is said to have knocked. The hotel has only eight suites, so the hall is quiet late at night.
The bath house: Three floors below the hotel, cut into the hillside, and still offering baths and massages more than a century after it opened. Book an evening treatment to see the old lower levels.
Spring Street outside: The town’s walking ghost tour passes the Palace on its way up Spring Street from the Basin Park Hotel, so you can hear the wider stories of the street on your first night.

History of Palace Hotel & Bath House

Eureka Springs grew almost overnight in the late 1870s and 1880s as people came to drink and bathe in its spring water, and bath houses were as important to the town as hotels. The Palace was built in 1900 and opened in 1901 with 15 or 16 guest rooms, electric lights, steam heat in every room and an electric elevator, all of which were worth advertising at the time. Its walls are rusticated limestone quarried at Beaver, the same kind of stone used on many of the town’s commercial buildings.

The architecture is a small piece of Richardsonian Romanesque. The architectural survey of the building in SAH Archipedia describes a taller central section with a large entrance arch topped by a second, two-story arch, a metal-covered mansard dome, a pressed-metal cornice and bold metal finials at the corners. The town’s promotional history likes to say it was modeled on a European castle, and from the street it does look like one.

The bath house sat three flights below the hotel and used spring water piped down the hill; one account names Sweet Spring and another Harding Spring. Early advertisements list massages, showers, hot and cold baths and vapor cabinets, and a 1920s booklet offered a Turkish bath for 50 cents. A barber shop appears in a 1904 advertisement, and the Palace Cafe and Palace Laundry in 1907.

Like the rest of Eureka Springs, the Palace struggled in the Great Depression and recovered after World War II, when tourism returned. The neon sign went up around the 1940s and is often claimed as the first neon sign west of the Mississippi, a claim no one has proved. The comedian W.C. Fields is said to have been a regular guest, another story that is told more often than it is documented.

Today the Palace has eight Victorian suites rather than its original 16 rooms, and it remains the only historic bath house in Eureka Springs still operating. The whole of downtown Eureka Springs is a historic district, which is why so many buildings on Spring Street look much as they did when the Palace opened.

Tips for a haunted stay

Book the spa as early as the room. Treatments, not ghosts, are why most people stay at the Palace, and weekend slots go fast.
Ask about Room 5 by phone if you want the story, but do not expect staff to talk it up; the hotel does not promote ghosts.
Join the walking ghost tour on Spring Street, which starts at the Basin Park Hotel and passes the Palace, for the town’s wider stories.
Make a weekend of it: dinner on Spring Street, a ghost tour at the Crescent Hotel up the hill and a late soak at the Palace.
Pack light. Spring Street is steep and parking downtown is tight; check the hotel’s parking page before you arrive.
October is the busiest month in Eureka Springs, so book autumn weekends well ahead.

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.

Haunted Thomas House Hotel Ghost Hunt and Sleepover, Tennessee: Our overnight investigation of a reputedly haunted 1890 hotel in Red Boiling Springs.
Hotel Metropolitan Ghost Hunt and Sleepover, Kentucky: A guided investigation and sleepover at the historic Hotel Metropolitan in Paducah.

See all Arkansas ghost hunts

More haunted hotels nearby

1905 Basin Park Hotel, Eureka Springs: a few doors down Spring Street, with its own paranormal investigations
1886 Crescent Hotel, Eureka Springs: Room 218, Theodora and the morgue, up the hill
The New Orleans Hotel, Eureka Springs: an 1892 hotel on the same street with its own ghost walk stories
Haunted hotels in Arkansas
Haunted hotels in Eureka Springs

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 Eureka Springs haunted?

It has a few ghost stories, but they are thin. A guest account tells of a bang on a couple’s door with no one outside, blamed on a madame from the building’s rumored brothel days, and a 2025 reader comment on a travel blog claims a woman was murdered in Room 5. The hotel does not promote hauntings, and we found no records behind the stories.

Was the Palace Hotel a brothel?

Local tradition says it was, and people in Eureka Springs still say so. The town’s published histories describe it only as a hotel and bath house, so the brothel years are best treated as folklore.

Is the Palace Bath House still open?

Yes. It is the only historic bath house in Eureka Springs still operating, with its spa three floors below the hotel. Book treatments through the hotel’s website or by phone.

How old is the Palace Hotel & Bath House?

It was built in 1900 and opened in 1901, with electric lights, steam heat and an elevator. It had about 16 rooms then and has eight suites today.

Can you request the haunted room at the Palace Hotel?

You can ask for Room 5 when you call, but the hotel does not sell it as a haunted room and cannot promise any particular suite.

What are the most haunted hotels in Eureka Springs?

The 1886 Crescent Hotel and the 1905 Basin Park Hotel, which both run ghost tours. The Palace and the New Orleans Hotel on Spring Street have smaller, quieter stories.

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.

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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