In 1958 the Molatore family, one of Klamath Falls' pioneer residents and community members, opened the original Molatore Hotel with just 36 units. Just a few years later, in 1961 the family added the restaurant to the business and it became one of many dining staples in the downtown market.
In the following year an additional 45 rooms were constructed when the Molatore family purchased the Del Castro Dairy and Copeland Lumber Yard. The bricks used in the construction of the building were made from the Klamath Brick and Tile Company.
In the years that followed the Molatore Hotel and Restaurant played host to many famous guests. Some of whom included Howard Hughes, George Peppard, and Samuele Sebastiani.
In 2012 the Molatore Family Hotel sold to Sanjay and Raj Patel and was operated under the Quality Inn flag. Finally in 2017, the property has once again passed hands and was reopened as the Cerulean Hotel an independent brand and sister property to the Klamath Falls' iconic Running Y Ranch Resort.