An enormous growling wolf is the first of many horrors to greet visitors entering the Black Monarch Hotel in Victor, Colorado.

Located in this once-abandoned mountain town, the Black Monarch hotel offers an over-the-top immersive art experience for those who fetishize nightmares and is the latest addition to a thriving haunted hotel industry that has become big business in Colorado.

Adam Zimmerli, the hotel’s owner and renovator, purchased the former brothel and saloon last year, amazed at how perfectly preserved it was from its 1899 construction. Zimmerli embraced the building’s reputation of being haunted by spirits of the past (Zimmerli says multiple people have seen a woman looking out from one of the hotel’s windows, even when it was empty) and outfitted each of the four rooms with a different spine-tingling theme to rouse the morbid corners of guest’s imaginations.

The Black Monarch isn’t unique in Victor in that sense. Strange sounds, moving objects and the appearance of translucent miners or bordello sex workers are said to haunt the entire miniature town.

Victor looks as it did in its heyday of the early 20th century, when it was the fifth-largest city in the state and was pumping out billions of dollars of gold (adjusted for inflation) out of the 500 mines that surrounded it. The town went from a booming economy with a population of 18,000 to nearly a ghost town by the 1990s, and it has a bloody past.

When miners attempted to organize, the corporations that owned the mines were ruthless in their union-busting techniques. “They hired gangsters to commit countless murders, train derailments, set fires, purposely collapse mines with people inside them,” says Zimmerli.

At the time, the Black Monarch was known simply as the Monarch, an upscale gentlemen’s club, where many of the millionaires who committed these atrocities probably gambled and drank before venturing upstairs to the bordello.

During the renovation, Zimmerli has maintained much of the design of a gold rush saloon (tall ceilings, tin-plated walls) but added a gothic tone in the form of black walls and ceilings, countless stuffed animals, skulls and vast libraries of books with titles like Carnal Crimes, Diseases of Children and The History of the Devil.

The HH Holmes room, named for the World’s Fair serial killer who murdered tourists while they slept in his hotel, is decorated with several human anatomy posters, antique medical equipment and instruments of torture like pitchforks, scythes and axes on the wall.

The room bearing the name of Elizabeth Báthory, the 17th-century Hungarian countess who is said to have bathed in the blood of her victims, is adorned with crimson walls, a bat encased in red velvet and ominous portraits of Báthory (including a sculpture of her in a red bath surrounded by heads on spikes) watching you while you sleep in a four-poster bed with black, sheer curtains.

The witchcraft room features pentagrams, goat skulls and an enormous bed suspended from the ceiling on thick ropes. In the nearby Nikola Tesla room (named for the pioneering and wildly eccentric electrical science genius) a series of elk skulls with enormous antlers are mounted above the bed next to oversized drawings of the Tesla coil, angry swirls of electricity mirroring the reaching antlers in a menacing way.

“I’ve seen people get so scared here they leave only a few hours after checking in,” the caretaker Jennings Davis says in a thick Mississippi accent.

Many of Victor’s current residents don’t feel terrorized by the town’s spooky appearances.

“We live with it every day, and aren’t frightened by it,” said Sue Kochevar, the co-owner of Victor’s only restaurant, the Fortune Club Diner. Located across the street from the Black Monarch, Kochevar says she often hears the sounds of footsteps in her empty building late at night, or objects falling randomly from shelves and locked bedrooms ransacked from the inside.

“We get a lot of paranormal investigators here,” she adds. “And they say there’s a lot of residual energy here from the gold rush days.”

In fact, many residents are welcoming the travelers motivated by rumors of hauntings.

Colorado’s haunted hotel industry boomed in no small part due to its role in the renowned horror novel and film The Shining.

Stephen King got the idea for The Shining at Colorado’s Stanley Hotel, and the place has managed to become one of the most popular destinations among paranormal tourists, particularly during its annual horror film festival. Room 217 – the one King was checked into during his lightbulb moment, and later used in the book – is the most frequently requested room, because of rumors of it being haunted.

Forty years later, rumors of hauntings have become a selling point, not a deterrent, for travelers across the US.

The Stanley Hotel in Estes Park, Rocky Mountain national park, Colorado, where Stephen King came up with the idea for The Shining. Photograph: Alamy

When filming for The Shining took place at the Timberline Lodge in Oregon, in 1979, the hotel’s management were so concerned about a PR crisis they requested that room 217 of the book be changed to 237 in Kubrick’s film, because they actually did have a room 217 and were afraid guests would think it was haunted. These days, the Timberline often gets requests from visitors who want to stay in the hotel where The Shining was filmed, some of them specifically for rooms 217 and 237.

In 1912, six children and two adults were murdered inside a small farmhouse in Villisca, Iowa, deterring potential renters or buyers of the property for years until a series of YouTube videos suggesting the house was haunted circulated among the ghost-hunting community. The owner was suddenly inundated with requests to stay the night. Despite having no running water or electricity, guests will now pay $428 a night to sleep in what is now advertised as “The Villisca Axe Murder House”. In 2014, one such guest of the house was found alone in a bedroom with a self-inflicted stab wound at 12.45am – the approximate time the axe murderer had struck more than a century earlier.

Stories like this are irresistible fodder to ghost hunters aiming to legitimize their profession. But for those looking for a more synthetic kind of terror with no real danger attached to it – similar to riding a rollercoaster or eating a habanero pepper – the vague, harmless glimpses of the supernatural experienced in Victor, Colorado, (whether real or imagined) are a bit more appealing.

Every hour of the weekend I spent in the Black Monarch hotel was punctuated with countless moments of adrenalized terror, believing I’d seen, heard or felt the presence of some gold rush apparition. I was primed for this at every turn, considering the lore and decor of the hotel, but it was a lot of fun.

“The people who come here love to be scared,” says Kochevar. “And that’s fine. But for us that live here in Victor, we like it for its authenticity, and the history of the town. All the ghost stuff is nice, but it’s just something extra that we’ve all gotten used to.”