Fretheim Hotel was constructed during the historic reign of the United Kingdom’s famed Queen Victoria, who sat on the British throne from 1837 to 1901.

In 1870, Lord Wigram's intuition to lease out fishing rights for the Flåmselva river proved to be strong, as an influx of foreign tourists began to visit Flåm to try their luck at angling. Many wealthy Englishmen were also lured by the large salmon and trout population, often staying long term at the farm of Christen Fretheim, the richest man in the village.

Due to the overwhelming interest and praise for the hospitality on the farm, Christen Fretheim decided to convert the building into a hotel designed to cater visiting English fishermen. The popularity of the hotel inspired local villagers to refer to it as the “English Villa.” At the turn of the century, business was booming. Fretheim’s cousin, Marthe, came to assist in managing the location. Known for her warm hospitality, Marthe Fretheim was responsible for the hotel's renowned garden that continues to inspire guests today. When Christen died in 1916, Marthe remained as the sole manager of Fretheim Hotel until her death in 1933. Her niece and nephew subsequently gained control, taking great care to ensure the legacy of the hotel.

Fretheim Hotel experienced varied developments over the next several decades, even briefly being renamed to Langseth Hotell. In 1999, Aurland Ressursutvikling AS took over operation. An extensive renovation of building concluded in 2000, which provided for new elegant lounges, conference facilities, and an impressive library. The restoration project also enabled the guestrooms to remain authentic with antique furniture, including claw-foot bathtubs and large fireplaces.