Leura author Julian Leatherdale's first novel Palace of Tears, captured all the drama, passion and history of the Hydro Majestic, said the Hydro Majestic's director Huong Nguyen.
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At the official launch of the book at the refurbished Hydro last Thursday, Ms Nguyen said she was proud to launch the book in the colourful former billiard room which reflected the original owner Mark Foy's fascination with the Orient.
Literary agent Selwa Anthony said over a 25-year career in publishing representing 60 authors, the venue had "probably been the number one for the spirit, the community and generosity".
Leatherdale's multi-generational gothic drama, loosely based on the Foy family, had informed Ms Anthony about the hotel's fascinating history and the harsh treatment of German Australians post World War I.
"It's a big story. Learning through fiction is a lovely way to learn," Ms Anthony said.
Ms Anthony told the audience she was behind Leatherdale's switch to writing for adults after he had spent time trying to break into the competitive field of writing for young adults.
Leatherdale said he had been inspired by the "high cliffs, sweeping views and ... the Antipodean madman's castle".
In its early days the Hydro hosted everyone from the Russian Ballet to Australia's first Prime Minister Edmund Barton and had electric lights four days before Sydney.