The Argyll Hotel marked the beginning of the career of St. Andrews as a watering place of note on the North American East coast. It was the Town's first summer hotel. The idea for such a venue was first mooted decades earlier, in response to increased tourist traffic to the Town over the St. Andrews and Quebec Railway, which since 1847 had been slowly extending its way towards Woodstock, which it was to reach in 1869. This need became even more critical after the completion of the Western Extension from Saint John to McAdam in 1871, for this meant that easy rail access to the town was now available through the St. Andrews Railway terminus at that station, and no doubt for that reason both Sir Charles Tupper and Sir Leonard Tilley purchased summer homes in St. Andrews in that same year. The need for more hotel accommodation became ever more acute when the Railroad Hotel burned in 1874 and Kennedy's Hotel did the same in 1876.
But funding problems delayed the project for many years until finally a scandal involving the railway company and St. Stephen bondholders in 1869, and the threat of court action forced the railway to guarantee funds sufficient to complete the long-delayed project. The Argyll (named after the Marquis de Lorne, Duke of Argyll, who had visited Canada some years earlier) opened in the summer of 1881 to great fanfare. Though a tad old-fashioned with its mansard roof, it was still the most attractive and fashionable structure to be erected in the town, and over the next eleven years was the venue of choice for the summer crowd. Robert Gardiner, future president of the St. Andrews Land Company, vacationed there during its early years, and along with Frank Cram, president of the New Brunswick Railroad and Eugene Fay, conceived the idea of a St. Andrews Land Company, a venture that would erect the Algonquin Hotel and put St. Andrews on the map as a first-class vacation resort town in the eastern part of Canada. Captain Herbert evidently knew that in 1888 a land boom was coming. He purchased the Argyll in that year and went to the United States to try to sell stocks in the Hotel so as to be able to finance a large new wing, which was never completed.
Captain Herbert died in 1891 and the Argyll burned in 1892, after only eleven years of existence. Robert Gardiner's plant to resurrect it never materialized, and the Algonquin, assuming the extra business, subsequently expanded several times as St. Andrews continued on unabled in its career as a host for summer visitors from New England, the Canadas, and the Maritimes.