In 1897, Mrs. Grace Lannin opened The Melbourne Hotel with her daughter, encountering legal issues for serving liquor after hours and a burglary within a year. Burglars stole the safe, later found burned nearby. Despite challenges, Grace managed the hotel for two years, demonstrating resilience. These early setbacks highlight the hotel's turbulent start and Mrs. Lannin's determination to overcome adversity.

Grace Lannin was fined for Sunday trading and trading out of hours on several occasions. During the same year Mrs Lannin was also sued by a Peak Hill miner, James Barret for overcharging him, by keeping him supplied with alcohol and in a drunken state, for the eight weeks in which he lived at the hotel. He won his case.

The Melbourne Hotel’s ownership was acquired by hotelkeepers Alexander McMaster and Edwin Wells in 1911 when John De Baun died at the age of 59. It was a bad luck story with the new owners not living long to enjoy their acquisition, with McMaster passing in 1912 and Wells in 1918, ownership was then split between the inheriting parties.

The Melbourne Hotel's bars were enlarged to cater to the increase in patrons coming in off the street to eat and drink.

Thieves targeted the Melbourne Hotel, stealing £112 and a loaded Belgian service pistol. The safe, transported in a stolen car, was later found in the bush, hacked open with the tools used for the burglary. A week later, an anonymous letter to the Daily News sought information about a reward, signed by an "observer." Despite Mr. Bird's efforts, a crime-solving enthusiast who traveled to the city, the case remained unsolved, leaving the mystery lingering.

With the increase in population and now more motor vehicles in the city The Melbourne Hotel added a parking garage to the premises.

The addition of a beer garden allowed for the hotel to cater for women as it was still not acceptable for women to drink in bars, however, both sexes could be accommodated in a communal beer garden and extended lounge area.

More bathroom facilities were added to the upper accommodation floors for better comfort of The Melbourne Hotel’s guests.

The Melbourne Hotel applied for an entertainment permit and before long it became a place for emerging live artists and bands.

During the 1980s to 1990s the ground and first floor of the hotel was home to many different attractions including The Pink Galah Cabaret, Middleways Piano Bar, Meccanos, Tiffany’s Nightclub and The Firm. The popularity of the venues over this time often found patrons to be more than double the allowed amount under the licenses.

In 1993, The Melbourne Hotel changed ownership, introducing a private gentlemen’s club with 212 businessmen joining for $5,000 to $7,500 each. A significant upgrade, including a Hay Street frontage, was undertaken to match the existing architecture. However, the gentlemen’s club never materialized, possibly due to the Asian economic downturn. Consequently, the hotel passed to new owners, leading to the refund of joining fees for prospective club members.

In 1997, the new owners restored and refurbished the hotel in a New Orleans style of décor and introduced the New Orleans bar, Mississippi corporate bar and French Quarter function room. By 2002 the interiors were redecorated again with a more Australian theme.

In 2007, The Melbourne Hotel changed hands once more, now under the current ownership. A redevelopment proposal followed, aiming to restore the hotel's original charm by removing the 1990s Hay Street addition and adding new facades to Hay and Milligan Streets. The owners, in collaboration with The Buchan Group architects, commissioned a conservation plan for the development. This planning and redevelopment process spanned over a decade, with a focal point on celebrating and preserving the hotel's rich history.