The Killarney Hotel, thus, moved to this new premises in 1933-34. It was renamed the Killarney Hotel – Marder’s Palace. In the years that followed, the property was simply known as the Palace Hotel. Its distinctive cups and saucers date to around 1953 when Karachi was still the capital of Pakistan.
Killarney was used extensively as lodging for US officers. The hotel ran well till after World War II. Marder sold the property sometime in 1946-47 and left the country. The Singhs of Calcutta are said to have taken it on.
After Partition, Indians were allowed to maintain private properties in Pakistan. In 1967, the government took over the Palace and it was sold to the Ramchandani family who operated it till it was bought by Sadruddin Ghanji. Ghanji demolished the old structure and built the current Hotel Sheraton in 1982.
The hotel held an important place in the social life of the city. The Palace Hotel, from 1948 to 1953 was the residential enclave of foreign diplomats. The Palace also attracted a regular crowd of intellectuals. It is said that Faiz Ahmed Faiz would be a part of those gatherings whenever he passed through the city.
In the 1950s, nightclubs were popular in Karachi and many of them were run by the major hotels. The Palace Hotel had the Le Gourmet nightclub, where jazz musicians from Karachi and abroad used to play. International travelers, foreign delegates and reporters, frequented the hotel in that era.
The Palace Hotel was ranked as the third best hotel in Karachi in the 1960s. (Historical background courtesy Sohail Ansari and Anadil Iftekhar based on information provided by Taj hotel owner Venu Advani).