Hotel Palace Berlin has a rich history closely tied to the city’s tumultuous past. During World War II, it provided refuge for men avoiding conscription and became a symbol of luxury in divided Berlin. In the post-war period, particularly during the Cold War, it served as a haven for political refugees, while West Berlin itself was a sanctuary for those escaping Communist regimes. Following Germany's reunification, the hotel underwent modernization and remains a prestigious symbol of Berlin's resilience, blending historic charm with contemporary luxury.

The Palace is integrated into the Europa Center which was Europe's first shopping mall in 1965. The shopping center, including the hotel, is based on the American model.