Munro was declared bankrupt in February 1893, and a new owner of the hotel took over in 1897. The hotel was amalgamated with the neighbouring Old White Hart Hotel, re-licensed, and its name was changed back to the Grand Hotel. In March 1898, the Constitutional Convention met at the hotel to finalise the final draft of the Constitution of Australia.
With the construction of modern 'international' hotels, starting with the Southern Cross in 1962, the Windsor declined in popularity. In a bid to regain marketshare, the Windsor expanded, purchasing the four storey White Hart Hotel on the Bourke Street corner. The White Hart was demolished and a new classically inspired extension using elements from the old hotel became the Windsor's north wing. Later in the decade a 25 storey residential tower was developed on the opposite side of Little Collins Street, significantly overshadowing the Windsor.
By the mid-1970s, the Windsor was run-down and the last of the major historic 19th century hotels in Australia still operating. The other major hotels, the Menzies (1867–1969) and the Federal (1888–1972) in Melbourne, and the Australia (1890–1971) and Metropole (1890–1969) in Sydney, had all been demolished.
Several proposals were put forward which included the demolition of the Windsor. A 1974 proposal for a 38 storey tower on the corner of Spring and Bourke Street was opposed by the state government and the National Trust. The Rupert Hamer-led state government purchased the building in 1977 to ensure its preservation and in 1980 leased it to The Oberoi Group.
Oberoi undertook a major restoration of the hotel in 1983 costing USD$6.6 million, reinstating the decorative 19th century colour schemes to the lobby, stairhall, and especially the Grand Dining Room, where huge brass chandeliers were reproduced from photographs. This was one of the first major private historic restorations in Melbourne, and won a Victorian Architect's Institute award. Its position as a leading five-star hotel and a major Melbourne landmark was then firmly re-established. The cricketer's bar, afternoon tea in the grand dining room, and the top-hatted doorman all resumed their status as Melbourne institutions. The John Cain II state government sold the hotel to the Oberoi Group giving the company freehold possession in 1990. In 2005, Oberoi sold the hotel to the Halim family based in Indonesia.
The Halim group first proposed to redevelop the Windsor in 2008 shortly after acquiring remaining shares from the Oriental Pacific Group and rebranding as "Hotel Windsor", with a $45 million redevelopment which proposed to modernise many of the interiors although they would not disclose whether the hotel was running at a loss or making a profit. The plan was approved by Heritage Victoria and the government after significant negotiations with the owners which included reducing the heritage impacts of the proposal. However development did not commence due to the Financial crisis of 2007–2010.
In July 2009, the Halim group proposed a new $260 million refurbishment project which would add 152 rooms to the hotel. This would involve demolition of the hotel's 1960s-era North wing, and replacing it with a contemporary building with facilities expected by guests staying in a five star hotel. A thin curtain wall tower designed by Denton Corker Marshall was proposed be built at the rear of Windsor Place. The architects proposed that the fritted wavy glass of the facade was a solution to minimise the visual impact of the tower. The application submitted to Heritage Victoria included restoration of the 1880s facade facing Spring and Little Collins Streets.
The National Trust of Australia (Victoria), opposed to the development responded with a campaign named 'Save the Windsor'. and claimed that the proposed tower was inappropriate and would breach established height controls for the Bourke Hill precinct initially put in place to protect vistas of the Windsor, Parliament House and St Patrick's Cathedral. These controls do not exist south of the Windsor where there are taller buildings, including 99 Spring Street, an apartment building completed in 1971. At 24 floors and 77 metres it is shorter than the proposed tower, yet it fronts onto the heritage precinct of Spring Street and is located directly next to the Windsor.
In late February 2010, a news leak occurred which erupted in a government scandal surrounding the redevelopment of the Windsor Hotel. A document prepared by a senior media advisor to Planning Minister Justin Madden was sent by email to the ABC Newsdesk. It detailed plans by the Victorian Government to run a sham community consultation process in a bid to reject the plans. In response to public outcry, a probity officer was appointed to oversee the decision making process.
On 18 March 2010, the hotel refurbishment and redevelopment plans were approved by then Planning Minister, Justin Madden. This was a major step in the planning permit approval process.
The Senate of Australia has officially recognised the national significance of the Windsor Hotel. The National Trust lost an appeal against the proposed refurbishment and redevelopment when it took the Hotel to the Supreme Court of Victoria.
Notable guests at the Windsor have included Margaret Thatcher, George VI of the United Kingdom and Elizabeth Bowes-Lyon (as Duke and Duchess of York), Meryl Streep, Anthony Hopkins, Gregory Peck, Laurence Olivier, Vivien Leigh, Katharine Hepburn, Basil Rathbone, Lauren Bacall, Douglas Fairbanks, Byron Sharp, Claudette Colbert, Robert Helpmann, Rudolph Nureyev, Dame Nellie Melba, Dame Joan Sutherland, Dame Margot Fonteyn, Michael Dukakis, Muhammad Ali, Barry Humphries, Don Bradman and the Australia national cricket team as well as Australian prime ministers Sir Robert Menzies, Malcolm Fraser, Bob Hawke, Paul Keating and John Howard.
Information courtesy of Wikipedia