There aren’t many hotels in the world like the Doma, the century-old establishment perched on the waterfront just east of Chania town centre. To ascend its curved steps and pass across its threshold is to enter a portal to the past, and if you are looking for a spot to reflect on Crete’s rich, turbulent history – or just a perfect place to unwind – look no further.

Decorated with exquisite antique furnishings – the walls adorned with fading framed photographs, documents and objets d’art – this former diplomatic consulate is the family home of its present owners – sisters Irini ‘Rena’ Valyraki and Ioanna Koutsoudaki, and their story is inextricably linked to this special place.

Built in the late 19th century as the consulate of the Austro-Hungarian empire, it was like all consulates in Chania, located in the affluent seaside suburb of Halepa. As WWI redrew the map of Europe and the old dynasties fell, by 1918 Crete had been unified with Greece, and the building went into private hands. In 1933 the consulate and its extensive grounds was purchased by Ioanna and Rena’s grandmother. Irini was born there the same year, but as war approached, the sisters’ time in their childhood home was to be shortlived.

In 1940, with Hitler’s armies on the march across Europe, the British Consul in Chania persuaded their father Kyriakos Koutsoudakis (a former employee of the company that operated the telegraph line from Crete to Alexandria connecting England with India) to lease the house to the British government.

For a year the family lived with the consul and his staff, before – on the eve of the invasion of Crete in May 1941 – they moved out, leaving their furniture and most of their precious heirlooms behind. Ioanna still remembers vividly the day the soldiers came from the sky.

Fate decided that she and her family would be at the centre of the storm. “My father had arranged for us to be taken to a village near Maleme,” says Ioanna, as we sit in the Doma’s fourth-floor dining room, with its sweeping panorama looking out over the bay.

“I remember the first night of the invasion. I was very afraid, my father took me in his arms, and the next day he took us in his car to the village of Elos, south of Kissamos, in the mountains.”

When Chania fell on 27 May the victorious German paratroops took over the British Consulate to use as their command centre. Ioanna and Rena’s home would host the uninvited guests for four long years. “We came back soon after the invasion,” says Ioanna. “I remember saying ‘who are all these strange people?’ and my mother telling me ‘it’s not our house anymore’.”

For most of the occupation the Koutsoudakis family lived not far from their requisitioned home. Like so many displaced in a town that was decimated by war, they made the best of it. “There were ten of us in my aunt’s house. Once a German soldier gave me some chocolate, and my father told me ‘you must not take anything from those people because they are not our friends’.”

Athens saw the Germans leave in October 1944, but ‘Fortress Chania’ would remain under Nazi control until 9 May 1945. The German surrender of the town would be the final act of World War II in Europe, but not even Chania’s liberation meant the sisters could return to their home.

“The British came to my father and they said they wanted to operate the house again as their consulate,” says Ioanna. “They stayed for ten years and I hated this situation.”

It would be 1955 before the house was finally restored to its rightful owners. Ioanna went on to study in Rome’s Academy of Fine Arts. Fluent in French and Italian, in the 1960s she began travelling – first hitch-hiking her way across Europe and then venturing to Asia. It was a road less-travelled for a young Greek woman of the time.

She was married briefly – a life in the United States beckoned – but it wasn’t to be. Rena wed a dentist. Hers was a long and happy marriage lasting 45 years.

Then in the late 1960s, Ioanna, who by now was living in Athens and running a fabric design and dressmaking business in the fashionable suburb of Kolonaki, suggested they turn the old family home into a guesthouse. The idea sprang from her time in Italy when she had seen similar family homes open their doors to paying guests.

The Doma Hotel opened in December 1971, and within months word had spread of its unique charm. Soon artists, celebrities, politicians and poets were staying, drawn to the building’s story and its graceful hosts. Its reputation as one of the most elegant and distinguished hotels in Greece grew steadily.

Some guests would return each year. Many still do. One of Ioanna and Irene’s favourites was the celebrated Italian writer and poet Antonio Tabucchi, who became a lifelong friend. British military types with clipped English accents (who served in wartime Crete as secret agents) stayed too, along with their former adversaries.

Once in the 1980s, a German war veteran – a Herr Voutkas (with only one hand, remembers Rena) who had lived in the house during the occupation, returned. It was only while checking-out that he summoned the courage to admit the circumstances of his previous residence.

The Doma still carries the echoes of all its histories. This is a place where the presence of its former incarnations – and those who spent time here – is everywhere.

Beyond its powerful history, perhaps it’s the glorious dining room overlooking the bay that is the most memorable experience, its walls adorned with family portraits and fading framed documents; or precious time spent in the dappled light of the serene walled garden; perhaps it’s the peaceful lounge, decked in antique rugs beside the exotic headdresses Ioanna created inspired by her travels, that stays with you. It’s all these things and more.

Until the late 1980s the Doma was open all year round. Today it reveals its delights only between April and November. On my last visit to Chania a sturdy lock and chain were wrapped tightly around the hotel’s elegant wrought-iron gate.

Ioanna and Rena were preparing to travel to Athens, as they have done for forty years, to spend winter in their Kolonaki apartment. Like the swifts that return to their nests nearby each year, they will be back when the buds of spring arrive.

As the waves break on the pebbled shore below, the Doma will wait for its genteel owners to return, to bring back their gracious hospitality and the manners of a bygone era.

* Michael Sweet travelled to Crete from Athens with the assistance of Aegean Airlines.