Prior to the development of railroads and the automobile, the Saranac Lakes formed part of an important transportation route in the Adirondacks; one could travel 140 miles across, from Old Forge to Lake Champlain, almost entirely on water. In 1849, William F. Martin built one of the first hotels in the Adirondacks— the "Saranac Lake House", known simply as "Martin's"— on the northeast shore of Lower Saranac Lake. Martin's, with room for 80 guests, became a favorite place for hunters, woodsmen, and socialites to meet and interact; a young Theodore Roosevelt was among the guests. The famous "Philosopher's Camp" launched from the shores of Lower Saranac to Follensby Pond where they spent the summer in 1838.  The party consisted of two poets, Ralph Waldo Emerson and James Russell Lowell; two scientists, Louis Agassiz and Jeffries Wyman; two lawyers, Ebenezer Hoar and Horatio Woodman; two doctors, Estes Howe and Amos Binney; John Holmes, the younger brother of writer Oliver Wendell Holmes, and William James Stillman. (The paintings in the Sunset Bistro are inspired by this epic expedition.) In 1892, Dr. William Seward Webb's Mohawk and Malone Railway reached the village of Saranac Lake; it dramatically reduced travel time from major east coast cities to the Adirondacks and had a major impact on the hotel and the area. In 1870, the hotel's capacity was doubled. In 1880, Martin lost the hotel through foreclosure. The new owner promptly remodeled and increased capacity to 250 guests. In 1888, it underwent its final renovations, but in 1894, it burned to the ground.

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In 1884, a new hotel was built half a mile southeast of Martins. Known originally as Alexander's or the Alexander House, with a capacity for one hundred guests, in 1890, it changed hands and was renamed The Algonquin. It quickly established a reputation for luxury, modern technology, and fine cusine, and the capacity was soon raised to 150. In 1914, the hotel was leased to a firm that tried using it as a tuberculosis sanatorium, an innovation that failed the first year. Although it resumed operation as a hotel, it never did well again, changing hands several times, ultimately becoming the property of Edmond Guggenheim, who owned property nearby; he donated it to the Trudeau Institute, which replaced the structure with their present building in the late 1950s.

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In 1888, a third hotel was built at the northern end of the lake, this on the western shore of Ampersand bay, the Hotel Ampersand. Originally conceived as a year-round health resort, banking on Saranac Lake's reputation for the treatment of tuberculosis, instead it found its best clientele to be healthy summer vacationers. The largest and most fashionable of the three hotels, it was dubbed the Saratoga of Lower Saranac Lake. It was saved from the slow decline of its neighbors by a spectacular fire in 1907. It was never rebuilt.