Dan Thompson's father started the inn in the main house back in 1920. The Thompson House was built in 1874 by Captain Alex Thompson, who fished for a living under sail. The area was a port of call for the steamers that plied the coast with passengers and freight, and was especially popular with the "folks from away".

The "folks from away" would come to New Harbor in the summer to escape the heat of the cities like Boston, New York, and Hartford to enjoy the hospitality of the numerous guest houses that emerged from the steamboat commerce. Today Thompson Cottages provides the same high standards of accommodation as it did in the days of the coastal steamers over 75 years ago.