The land the hotel was built on was formerly part of a Piankeshaw Indian summer campground. Thomas S. Hinde purchased the property in 1815 from the United States Government and quickly with other Methodist ministers founded the city of Mount Carmel, Illinois. To help entice people to settle in the city Thomas S. Hinde created the Wabash Navigation Company and eventually was able to charter a dam to be built next to the property where the hotel was later built. After the Grand Rapids Dam was completed the dam and Hanging Rock drew large numbers of tourists in the decades that followed.