The idea of building this "dreamy" international hotel came from a Karlovy Vary banker and entrepreneur Alfred Schwalb.At the beginning of the past century, he bought the lots Na čihadle, located ideally above the city, which even then did not have enough accommodation capacities for its guests. He hired the experienced French engineer Ernest Hebrard who, among other things, participated in the construction of Hanoi or the Greek Thessaloniki. According to his drafts and under his leadership, the city got its new dominant feature on the Helenin dvůr hillside between 1910 - 1912. 

The Hotel Imperial was, besides others the first structure within the Czech territory, which was built using the new technology of poured concrete.

To avoid buying other lots and renovating many houses, he planned the entire funicular in a tunnel. The city council supported the project, because it did not disturb the appearance of the romantic hill close to Vřídlo (the Thermal Spring). The famous Swiss engineer Emil Strub, undertook the project; other specialists came from Italy, and initiated the construction at the Divadelní square in December 1905. The tunnel through the rock was thrust simultaneously from the top to the road above Nebozízek. The entire 127 meter route of the funicular was one-rail with a turnout in the center.The operation was ensured by Karlovy Vary Electric Funiculars using two wooden carts with open platforms since May 10th, 1907.

Back then, the funicular only worked in the summer. Unaltered, it worked until 1955. Then, its new owner (Transport company of the city Karlovy Vary) decided to renovate it. The entire machinery of the funicular was replaced during the reconstruction. The carts remained the originals until the year 1961, , when the wooden boxes were replaced with metal ones. During another general reconstruction completed in the year the tunnel was fixed and a new cart supplied. Since then, the Imperial funicular is,as a part of the Karlovy Vary public transport v in operation in 15 minutes interval throughout the entire day. The second funicular was launched in operation only a few days before the opening of the Hotel Imperial in June 1912. It was 126 meters long and its maximum slope achieved the record 570 per mille. This surface funicular survived both world wars, but was terminated in 1959 for bad technical conditions.

Bulgarian Tsar Ferdinand I / Grand Duke Paul Alexandrovich Romanov (son of Russian Tsar Alexander II) / Prince Friedrich Leopold (brother-in-law of German Emperor Wilhelm II) / Archduke Franz Salvator of Austria-Tuscany (son-in-law of Emperor Franz Josef I) / George Herbert, 5th Earl of Carnarvon (best known as the benefactor of archaeological excavations in Egypt that lead to the discovery of the famous Tutankhamun's tomb) / Grand Vezir Hussein Hilmi Pasha / Egyptian Prime Minister Mustafa el-Nahhas Pasha / Members of the Rothschild dynasty (Maurice de Rothschild, Henri de Rothschild…) / William Steinway – world-famous piano maker / Prague factory owner Kolben / Jan Antonín Baťa – entrepreneur / Mary Pickford – actress / Douglas Fairbanks – actor / Gustav Machatý – film director /Oskar Straus – Viennese music composer / Seal – singer / Pál Schmitt – Hungarian President (2010 Visegrad Group meeting) / Bronisław Komorowski – Polish President (2010 Visegrad Group meeting) / Ivan Gasparovič – Slovakian President (2010 Visegrad Group meeting) / Václav Klaus – President of the Czech Republic / Miloš Zeman – President of the Czech Republic

Hotel Imperial is famous thanks to

Lord Richard Westbury.