Superstars and royalty have laid their heads in Sydney hotel with a tragic story, writes Lauren Quaintance.

Just about every city has a hotel made notorious by the exploits of its more famous guests. In New York, it's the now-shuttered Hotel Chelsea, a bohemian institution where Arthur C. Clarke wrote 2001: A Space Odyssey and where Nancy Spungen, girlfriend of Sex Pistols bassist Sid Vicious, met an untimely end.

At the Chateau Marmont in Los Angeles, James Dean once jumped through a window to audition for Rebel Without a Cause and Anthony Kiedis of the Red Hot Chili Peppers recorded his vocals for By the Way in his room.

Until the early 2000s, Sydney's most storied hotel was the Ritz Carlton in Double Bay, where Princess Diana stayed in 1996 and former Prime Minister Bob Hawke married his biographer Josephine Blanche d'Alpuget and lived for two years.

The hotel never quite recovered from the death of INXS frontman Michael Hutchence, who accidentally asphyxiated himself in Room 524 in 1997. The 140-room hotel closed, was briefly reopened as The Sir Stamford, before shutting again a couple of years later and standing idle for half a decade.

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In a way, the hotel's fate portended the decline of the once-genteel harbourside neighbourhood that surrounded it. Double Bay was one of Sydney's most prestigious suburbs in the 1980s and coiffed European emigres gathered at Double Bay institutions such as The Cosmopolitan cafe.

With its velvet seats and grand piano, the Cosmo in Knox St was modelled on the salons of Budapest and Vienna. But in the following decade, the suburb abruptly fell out of fashion.

InterContinental Sydney. Photo / Supplied
InterContinental Sydney. Photo / Supplied

During this time the ghost of the once grand Ritz Carlton loomed large over Double Bay; while developers haggled with the council over the site it was used for Russian dance parties, its rooms reportedly used by sex workers.

Then a proposal by the Singaporean company behind the Intercontinental group - which saw its potential as the only five-star hotel outside the CBD - was approved and late last year the hotel was reborn.

The faux-Regency facade remains, but some of the dark and opulent wood panelling has been banished in favour of a lighter but still conservative look. The new owners retained the structure of the old building and there are still 140 rooms - some overlooking the harbour and others overlooking the village. The rooms have been tastefully revamped except, strangely, the original narrow bathtubs remain.

The fifth-floor Royal Suite - where Princess Diana was famously photographed peeking out of the curtains and Madonna and Bill Clinton also stayed - is like a well-appointed apartment with its own study, eight-seater dining table and servery, as well as a wardrobe with space for 80 shoes.

An elegant bar just off the foyer called Stillery serves no fewer than 65 brands of gin including Rogue Society, Black Robin and Broken Heart from New Zealand. At the restaurant, Stockroom, the menu was inspired by Double Bay's history more than 200 years ago as farmland and market gardens and it namechecks a who's who of Australian providores and producers.

Photos: Intercontinental Double Bay, Sydney

Rooftop bar at the InterContinental Sydney. Photo / Supplied
Rooftop bar at the InterContinental Sydney. Photo / Supplied