Credit: Photo courtesy Chico Hot Springs Resort

DiamondRock Hospitality Company announced Wednesday that it has purchased Chico Hot Springs Resort in the Paradise Valley for $33 million. 

The Maryland-based hospitality company owns 35 hotels and resorts in 13 states and the District of Columbia. Chico is its first acquisition in Montana or the broader Pacific Northwest. The 117-room resort and adjacent ranch sit on a combined 748 acres at the base of Emigrant Peak, not far from the northern entrance of Yellowstone National Park. 

“Chico Hot Springs Resort is another example of DiamondRock’s leadership in identifying attractive investment opportunities that align with our focus on unique, leisure-oriented experiential hotels and resorts,” DiamondRock President and Chief Executive Officer Mark W. Brugger said. 

Brugger added that Chico is a distinctive addition to the company’s portfolio and that he is confident DiamondRock can achieve a “superior return” on its investment. 

“Chico has numerous of the attractive attributes we target, such as durable cash flow, significant [return on investment] opportunities, irreplaceable location, fee-simple and fully unencumbered by brand and management,” Brugger said. 

Chico is the latest in a series of well-known Montana resorts to be sold to out-of-state interests in the last few years. In 2022, the owners of the Holland Lake Lodge entered into a partnership with Utah-based POWDR to redevelop the iconic lodge in the Swan Valley. That plan was put on hold, however, after drawing significant opposition from locals, though POWDR officials say they aren’t giving up on the project. In December, Washington-based LOGE Camps announced it is purchasing the Izaak Walton Inn near Glacier National Park. A few months later, LOGE also purchased an old hotel in Missoula and later told Montana Free Press the company sees even more opportunities for expansion in the state

Chico Hot Springs Resort got its start in 1900 as the Chico Warm Springs Hotel. The 10-room boarding house catered mostly to miners in the area and was run by William and Percie Knowles. Percie was a schoolteacher and vocal prohibitionist, while William was a rancher and hunter known to look the other way when rum-runners were in town. 

In contemporary coverage, the Livingston Enterprise reported that the hotel opened with a “big jollification” on June 20, 1900, welcoming guests with a brass band, ball and tea. For $6 a week, guests could get a clean bed, a hot bath and fresh strawberries with every meal. 

Over the next few years the hotel grew from 10 to 20 rooms, and a 40-foot-long, 6-foot-deep hot springs “plunge” was constructed. As time went on, the hotel’s clientele changed from rough-and-tumble miners to vacationers delivered by the Northern Pacific Railroad bound for Yellowstone. 

After William Knowles passed away in 1910, Percie transitioned the hotel into a health spa and resort. In 1912 she hired Dr. George A. Townsend, who promoted the health benefits of mineral pools as a cure for disease and other ailments. A 20-room hospital was built on site and in 1920 it admitted 2,390 patients. More than 900 surgeries were performed there that year and 32 babies were born. The following year, Townsend conducted one of the first brain surgeries in the region at Chico. 

The hospital continued to operate for a few years after Townsend retired, but by the 1930s the facility had fallen on hard times. Percie Knowles eventually transferred control of the resort to her son, Radbourne, and his wife, Agnes Sophia. The family operated the resort into the 1940s before selling it in 1948. Over the ensuing decades, the resort would operated with multiple owners and themes, from guest ranch to boutique hotel. In 1973, the property was sold to Mike and Eve Art, who ran it for four decades and built it into the facility it’s known as today. In 2015, it was sold to the Davis family, which owned it until today’s sale to DiamondRock. 

DiamondRock has not said whether it plans any changes to the resort, which was added to the National Register of Historic Places in 1998. 

This story was updated Aug. 3, 2023, to correct the year in which the resort was sold to the Davis family.


Justin Franz is a freelance writer, photographer and editor based in Whitefish. Originally from Maine, he is a graduate of the University of Montana's School of Journalism and worked for the Flathead Beacon for nine years. His work has appeared in the Washington Post, Seattle Times and New York Times. Find him at or follow him on Twitter.