Dunheved had been a private residence on Victoria Gap, the saddle near the summit of Victoria Peak, with views across Victoria Harbour on one side and Pok Fu Lam facing Lamma Island on the other. Findlay Smith converted it into a hotel with twenty bedrooms, aimed primarily at summer visitors seeking relief from the heat of Central Hong Kong. The Peak, at around 550 metres above sea level, is measurably cooler than the city below — a meaningful difference in a subtropical climate before air conditioning. The arrangement worked well enough that Findlay Smith quickly put the hotel on the market after the tram opened, selling it to new owners who recognised its potential.

The new owners did not tinker with what they had inherited. They rebuilt. In 1890, the original structure was demolished and replaced by an imposing three-storey building, described at the time as offering commodious and well-appointed accommodation. The hotel was, by the accounts of the era, deservedly popular. More floors followed: a fourth storey was added, and then a two-storey annex with views toward Pok Fu Lam was constructed. A further addition doubled the annex and added a third storey. What had started as a modest twenty-room house became a substantial hilltop establishment commanding panoramic views in both directions — the harbour city glittering to the north, open water and islands to the south.

In 1922, the Peak Hotel was purchased by the owners of the Hongkong Hotel, a rival operation down in the city. The price was HK$600,000. The acquisition made competitive sense — eliminating a competitor — but the new owners showed little interest in maintaining the property. The building's poor construction, which had perhaps been masked by the dramatic setting, led to progressive deterioration without adequate upkeep. The Peak Hotel closed in 1936, forty-eight years after it had opened its twenty bedrooms to the first summer visitors arriving by tram.

The site at Victoria Gap where the Peak Hotel once stood is occupied today by The Peak Galleria, a leisure and shopping complex. The hotel is gone, and the building that replaced it is of an entirely different era and purpose. But the view from Victoria Gap is unchanged: Victoria Harbour spreads below to the north, cargo ships and ferries threading between the towers of Kowloon and the towers of Hong Kong Island; Pok Fu Lam stretches south, quieter and greener, toward the open water. Findlay Smith chose the location well. The hotel lasted forty-eight years. The view has lasted rather longer.