The hotel was planned and built by general manager Axel Lund. The foundation wall was built in 1934 and a few years later the hotel was finished. The hotel, costing NOK 350.000, had become a magnificent building according to standards at the time. The doors opened for the first time on the 17th of May 1937. Strand Hotel was used only as a summer hotel and had initially 40 rooms with totally 70 beds. All guestrooms had both hot and cold water. Three rooms had a shower, whilst 9 had a bathroom..
The married couple Frida and Harald Hansen were general managers from the start. They came from director Lunds hotels in Stavanger. With its excellent standard and beautiful position Strand Hotel soon became popular. Many foreign guests came and the restaurant was well attended. Stand Hotel had three good seasons before the war broke out. In April/May 1940 one got other foreign visitors as the hotel was sequestrated as a health resort for German officers. Thanks to the efforts of Frida Hansen and the rest of the Norwegian staff, the damages to the hotel were limited.