Number 20 Bourke Street has lived many lives. Many Melburnians would know it best as the Palace Theatre – a beloved entertainment venue that itself had many iterations and dated to 1912, finally closing in 2014. The theatre hosted the iconic Metro Nightclub for over 20 years from 1987. But back when Bourke Street was still a dirt road, in the mid 19th century, the site was occupied by a hotel – first it was the Excelsior Hotel, which was then renamed Stutt’s Hotel, which was then renamed Hotel Douglas. It burned down in 1911.

Now, 112 years later, the Bourke Street site is once again home to a hotel. The new Le Meridien opened last week with 235 rooms across 12 storeys, a spectacular rooftop pool and several dining spaces, including a restaurant and ground-floor cafe-slash-wine bar. Not since the early 2000s has the French hotel brand had a property in Melbourne, when it had a hotel on Collins Street.

The interior of the five-star hotel (Le Meridien is part of Marriott Bonvoy stable) has taken cues from its prior inhabitants. While the theatre’s dress circle has been decommissioned, the historic art deco facade remains, and is now illuminated by Hollywood lights and a mural by local artist Stephen Baker – a nod to the MGM cinema that occupied the building for almost 20 years in the 1950s and ’60s.

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In a similar vein, the lobby cafe and wine bar, Intermission, resembles an old-school concession stand. It serves Axil coffee, canelés and cacio e pepe omelettes by day, and a rotating selection of Victorian wines and small plates at night.

But the real theatre starts as you descend the very photogenic art deco spiral staircase to Dolly, a shimmery new restaurant where it feels like you’ve stepped inside the silver screen. Large arched mirrors reflect the slick brown leather banquettes and glistening fluted chrome accents. Even the marble tabletops seem to sparkle. Dolly’s executive chef is Christian Graebner, who has spent 17 years in hotel kitchens. It’s classic European fare, with a signature beef Wellington that draws on Graebner’s classical French training in butchery and patisserie, and a bombe Alaska torched tableside.

A central bar (dressed in red carpet and red banquettes and curvaceous modular lounges with matching pouffes) serves cocktails created in collaboration with The Everleigh. Signature cocktails are inspired by artists who graced the stage and screens of the old Palace Theatre. A twist on an Old Fashioned, the Mr Miller, is inspired by the musical Hair, which had a 39-week season at the Palace in the 1970s. The Vanity is a purple twist on the Martini, inspired by the singer of the same name and Prince’s one-time lover and muse – Prince played Metro Nightclub in 2003.

On the fifth floor is the hotel’s showpiece 18-metre pool, with views of the Melbourne skyline and Parliament House. It’s an amenity for guests only, but there are plans to open it up for movie screenings and one-off DJ nights. Pool-goers can order lobster rolls, champagne and Pomme Spritzes, all best enjoyed while horizontal on a sunbed with office workers gazing enviably at you from the adjacent towers.

All 235 rooms and suites take their design cues from mid-century Melbourne. Underfoot, a map of Melbourne has been transposed onto the carpets. Dark timber furnishings provide a warm, homely atmosphere that’s enhanced by air force blue accents, artworks and a selection of architecture and travel books. Bathrooms are stocked with Malin & Goetz bath products, and the suites have turntables and vinyl by artists who performed at the site over the years, including James Brown, as well as Prince and others.

The hotel has made an effort to embrace the cultural significance of the site’s past, while also creating spaces where you’re encouraged to linger, enjoy some old-school hospitality and indulge.