During the Middle Ages it was part of the district of Saanen. The village core developed at the fork in the trails into the Valais and Vaud. It had an inn, a warehouse for storing trade goods and oxen to help pull wagons over the alpine passes by the 13th-14th centuries. The St. Nicholas chapel was built in the village in 1402, while the murals are from the second half of the 15th century. The village was dominated by cattle farming and agriculture until the great fire of 1898. It was then rebuilt to support the growing tourism industry. The construction of the Montreux-Oberland Bernois rail road in 1905 and the construction of ski runs (the Ski Club of Saanen open in 1905 followed in 1907 by the Ski Club of Gstaad). The first ski school in Gstaad open in 1923. In a short time there were more than 1,000 hotel beds in the region.
The residents, hoteliers, shopkeepers and tourist offices helped to promote Gstaad to international attention. They supported the construction of ice rinks, tennis courts, swimming pools, ski jumps and ski and hiking areas. The first ski lifts at Funi opened in 1934-44, and was followed by a number of gondolas, ski and chair lifts. The Palace Hotel opened in 1913 as Gstaad's first luxury hotel. In 1942 the Saanen-Gstaad airfield was opened for military and civil aviation. Helicopter rides were added later and in 1980 balloon flights became available as well. During the World Wars and the Great Depression, the tourism industry suffered and many hotels closed. After World War II, many of the large hotels remained closed, but they were replaced with a number of smaller non-hotel accommodation (chalets, apartment houses, residences). Most of the modern resorts and small hotels are built out of wood and retain traditional design elements
