The hotel was constructed in 1924 to replace the old Paris Hotel, which was destroyed in a fire in 1918. The hotel's construction was sponsored by the Paris Chamber of Commerce and funded by the citizens of Paris; as most hotels of the era were built by private firms, this was considered unusual. The Chamber decided upon the site of the hotel in 1922 and chose the building's architect, but planning and construction delays pushed the project back into 1923. By September 1923, the Chamber had nearly exhausted its funds, and the hotel's contractor intended to place a lien on the hotel site if they could not find more money. The citizens of Paris responded by raising $191,000 in a fundraising effort, providing the necessary funds to complete the hotel.