In 1864, Napier had a population of around 1200 people. To serve this population, there were 13 hotels with public bars.

In their favour was the garrison established on Napier Hill in 1858. When the soldiers pulled out of Napier in the 1860s, the annual licensing meeting of awarding publican licences said the population could not stand any more hotels in Napier.

It was common for a brewery or merchant firm to own the hotel building and to lease it to those awarded a licence to operate the hotel.

Competition was fierce amongst hoteliers, and some went out of business.