The hotel was built to replace the Old Dunn Bull Inn, which was flooded when the Dam was completed.

Walls were constructed using local stone and the roof was made of Cumberland slate from old farm buildings in Mardale.

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Coping stones in the gardens were also reused from submerged Mardale walls and antique bell pulls removed from buildings in the valley were used in the new hotel 'Modern' methods were also used, including the use of thin-frame Crittall steel windows and extensive use of Douglas Fir plywood.

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The hotel’s public rooms made specific provision for walkers, casual visitors and residents while staff were recruited locally. The first managers, Mr and Mrs Hazlehurst, had previously been running the Dun Bull.

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Cutlery and furnishings, newly ordered from high quality suppliers like Waring and Gillow, were marked with a Manchester emblem. A stained glass window incorporating the city’s coat of arms was placed at the centre of the main staircase and a stag’s head from Haweswater, presented by a member of the Waterworks Committee, was mounted in the entrance hall (It is still at the Hotel).