From the hotel's website we read of that history...
"Due to the Telemark canal Dalen became a crossroad between Christiania (Oslo) and Bergen. The tourism was quite large as early as 1892 when The Telemark canal opened. Norway was an exotic and exciting country to travel to, and Dalen was missing a so called "luxury hotel" for the rich and prominent. With inspiration from our stave churches and elements form the viking period Dalen Hotel was raised in 1894. Hans Larsen, a wealthy businessman from Skien took the initiative together with Lars Rød, also form Skien and Anton Hansen from Porsgrunn. As architect they hired Haldor Larsen Børve from Ullensvang, educated in Germany a so-called Hannoveran to whom the Swiss building style meant the most.
"From day one the hotel was a majestic building build in European wooden architecture brought into the Norwegian style with dragon heads and spear, the birth to a golden age.........
...a castle of mysticy and greatness. Royalty and locals were catered for. To Dalen Hotel came the British aristocracy, King Oscar II of Norway and Sweden, the King of Siam, Emperor Wilhelm of Germany and King Leopold of Belgium. Guests has also included King Haakon VII and Queen Maud of Norway with Crown Prince Olav. Prominent guests from all over Europe. They arranged great balls and danced their valses for half a century through happiness and sorrows, through wars and peace.
The golden age ended with the second world war. German officers took over the hotel and guests disappeared together with most of the original interior. The maintenance was not done and after the war it looked like doomsday for the once so-magnificent hotel. Many owners and different forms of management were tried. At the end the hotel closed and was almost falling apart due to total lack of care. It is said that it was even being thought to be used as a huge fire drill as it became a shame to Dalen village.
Finally at the end of the 1980's the last effort was made to restore the hotel. In 1992 the hotel opened again, a total renovation was done and with big visions. The renovation was so well done that the hotel in the year 2000 recieved the greatest reward in Europa, the silver medal of Europe Nostra for restoration and keeping the hotel as a unique cultural heritage."
The following tourism video features some great detail of the hotel and in highlighting other attractions in the Telemark area, gives one a sense of just how pervasive wood is in Norwegian culture.
Warning: vacation fever alert!