Situated at the south-east corner of Bourke and William streets, Menzies Hotel was the first of Melbourne's grand hotels and certainly one of the finest. In 1872 English author Anthony Trollope noted that he had never stayed 'at a better inn in any part of the world'. The site was purchased in 1867 by Mr and Mrs Archibald Menzies whose Menzies Family Hotel in La Trobe Street dated from 1853. Designed by Reed & Barnes and constructed at a cost of £32 000 by David Mitchell, the three-storey building with columned arcade and pavilion towers opened in November 1867. Two floors and a corner tower were added in 1896 and electric light, telephones and a lift were installed. Suites were either painted white or walnut-panelled and had French bedsteads.
A six-storey Bourke Street wing was added in 1922 providing en-suite bathrooms and an enlarged dining room. Menzies' guest list included royalty, Mark Twain, Sarah Bernhardt, Ignacy Paderewski, Alexander Graham Bell and Herbert Hoover. The Menzies family interest remained until the hotel's purchase in 1936 by Sydney financier Bede Rydge. In 1942 it became South-West Pacific headquarters for General Douglas MacArthur for several months. It was sold in 1964, then closed and demolished in 1969 to make way for construction of offices for BHP.