Palace Hotel

The Palace Hotel in Port Townsend, a former 1925 brothel run by madam Marie Martin, houses at least ten spirits including the Lady in Blue who appears in Rooms 3 and 4 in an old-fashioned dress with the scent of perfume. The hotel has maintained "The Ghost Files" since 1987 with over 100 documented encounters, and every guest room is still named after the women who worked there.

The Palace Hotel in Port Townsend keeps a guest book that is not for compliments. Called "The Ghost Files," it has recorded more than 100 paranormal encounters since 1987. Staff add new entries about once a week. Guests contribute once or twice a week on top of that.

The hotel occupies the second and third floors of the Captain Tibbals Building on Water Street, a Richardson Romanesque structure built in 1889 by retired sea captain Henry L. Tibbals. From 1925 through at least 1940, the upper floors operated as a brothel run by a madam named Marie Martin. Every guest room is still named after the women who worked those rooms. Marie's corner suite has been restored to match her taste. The brothel era gave the hotel its nickname: the Palace of Sweets.

At least ten spirits are believed to occupy the building. The most prominent is the Lady in Blue, also known as Miss Claire. She appears in an old-fashioned blue dress, most often in Rooms 3 and 4, accompanied by the scent of perfume. A large portrait of her hangs at the top of the main staircase. The legend says she worked in the brothel and lost a lover, and her spirit leaves the portrait to walk the halls searching for him. Guests in Rooms 3 and 4 report their beds shaking at night. Ghostly moans come from the walls. The phenomena in those two rooms are frequent enough that the hotel acknowledges them matter-of-factly.

Marie Martin herself may still be present. Her suite, Room 3, has produced EVP recordings and shadow figures during investigations. In early January 2025, Ghostly Activities conducted a two-night investigation with a six-person team. On the first night, investigator Melissa held a French 75 cocktail seance in Marie's suite. Jake heard a woman's voice and felt sharp ear pain before his equipment malfunctioned. On the second night, team member Mike heard his door handle being manipulated at 3 a.m. in Room 4, accompanied by the sound of jangling keys. Kim, sleeping in Room 6A, was whispered in her ear at 6 a.m.

The haunting extends beyond the brothel ghosts. In the basement, staff have seen the apparition of a homeless man in a plaid shirt. The previous owners had given him a place to stay in the building, and after he died, he came back. On the upper floors, the apparition of a Native American woman and her ghostly children move through the building. They are linked to a fire that killed them in the building's early history.

Room 10B carries a presence named Stanley, described as a boy spirit. Investigators have recorded talking coming from the bathroom when the room is empty. Shadow figures move along the walls.

The Palace Hotel investigation in 2025 used Spirit Chat 4.0, an Ovilus, an SLS Mini, and a ghost box across multiple rooms. The results confirmed what the Ghost Files have been documenting for nearly four decades: the building is active, the activity concentrates on the second floor, and the spirits interact with the living. Door handles turn. Keys jangle in empty hallways. Whispers arrive at dawn.

Port Townsend treats its ghosts as neighbors. The Palace Hotel treats them as permanent residents. Every room carries a name from the building's past, and at least some of the women those rooms are named for seem to still occupy them. The most recent entry in the Ghost Files is from last month.