The Bala Bay Inn was built for E.B. Sutton by noted local builder J.J. Knight and opened on July 17, 1910. It was the first brick hotel in Muskoka and was originally named the Swastika Hotel. The swatiska was an international symbol of good luck until the 1930s and 1940s at which time these symbols, which were built into the design of the brick on the inn's walls, were painted over and the name of the hotel was changed. The name changed numerous times to Sutton Manor, Bala Bay Lodge, Cranberry House and, finally, its present name of Bala Bay Inn. President Woodrow Wilson cottaged in Muskoka and is rumoured to have stayed at the Bala Bay Inn just 24 days after the start of World War II, when the US was not yet involved in the war, in attempts to garner peace talks. This claim is widely debated in the area; however, there are some clues that indicate the possibility that it is true including Sutton's son Fred's declaration that he had met President Wilson and the hotel register, which lists a guest by this name that was from Washington, DC. Interestingly, there were also entries for a German Count and Countess, a woman from France, and a British couple from Argentina for the same date.

The Bala Bay Inn is a vernacular construction inspired by the Neo Classical style. It features a T-shaped footprint, nine bays on the front façade creating a symmetrical appearance, and an enclosed verandah that surrounds the front facade. It is a red brick construction with a flat roof, dentils, semi-elliptical window openings with voussoirs and shutters, and a central entrance. Just above the balcony in the centre bay there is a painted over swastika design in the brick that is noticable upon close inspection. There are supposedly four other painted-over swastikas on the other sides of the building. Original interior features include the mahogony grand staircase and the tin ceiling.