In 1925, the property was sold. At this time, the large extension was added and the building became The Palace Hotel. Intended to be Paignton’s premier hotel, it became the social hub of the town.
During the Second World War, HM Government requisitioned The Palace for the Canadian Armed Forces. There are pictures in the Washington Bar showing the hotel at this time.
Trust Houses bought The Palace Hotel in 1950, and retained it until 1990 when, as Forte Hotels, the company was broken up and its many hotels sold off.
After another company who kept it for ten years bought the Palace in 2001, the Palace was passed into its current ownership, since when it has benefited from an on-going programme of significant refurbishment and upgrading.