Coffee palaces were grand hotels that refused to sell alcohol, an outgrowth of the temperance movement’s campaign for total abstinence. The first attempt, Gerrit Smith’s temperance hotel in Peterboro, New York, in 1826, failed. The idea found firmer ground in the United Kingdom from the 1830s, where coffee taverns were built to the size of a local pub with the same meeting rooms, entertainment, cheap food, and lodging, and it grew into major architecture such as the French Renaissance Trevelyan Temperance Hotel in Leeds in 1872 and the Gothic revival Cobden Coffee Palace in Birmingham in 1883.

At a meeting in the Melbourne Temperance Hall in October 1878, backers resolved to build palaces attractive to the working man on a business basis, just as the 1880s Melbourne land boom took off. The Collingwood Coffee Palace opened in 1879 and the Melbourne Coffee Palace in 1882. In 1886 a company led by politician and land boomer James Munro bought the three year old Grand Hotel on Spring Street, renamed it the Grand Coffee Palace, and burned its liquor license, and in 1888 the Federal Coffee Palace became the largest hotel ever built in Australia. The 1893 banking crisis and depression left these bar-less hotels with no margin to survive.

• Sydney joined the boom with the Grand Central Coffee Palace in 1889.
• The Queen’s Coffee Palace in Carlton was turned into apartments without ever operating as a hotel.
• The Grand Coffee Palace regained its liquor license by 1897 and still stands as the Hotel Windsor.
• The Mentone Coffee Palace was sold and became a school that operates today as Kilbreda College.
• The Federal Coffee Palace was demolished in 1972 to make way for an office tower.