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The Royal Theatre is nestled in the heart of Hobart. It is home to musical and dramatic productions, opera and ballet. It is also Australia's oldest operating theatre, housed in a building constructed between 1834-37. It has been demolished several times, but these plans were never realised. In the 1940s, Laurence Olivier, the great English actor, performed here and urged the people of Tasmania not to allow this temple of art to be destroyed. In 1950, actresses Gwen Frend and Fifi Banvard heard of further plans to demolish the Theatre Royal. They cancelled their overseas tour, which they were due to embark on in a few days, and came to Hobart, where they rented the theatre building. Gwen gave £28,000 to restore the building and set up a production company which produced various shows over the next year and a half. However, after the end of the lease, the building fell back into disrepair.

Irreparable damage to the building was caused by a major fire in 1984, which damaged the interior interiors and ceiling paintings. It took several years and one million dollars to restore the lost sets and artwork. But the theatre's administration coped, and today it is once again welcoming visitors.

A famous "inhabitant" of the theatre is a ghost named Fred - it is said that an actor was once murdered in the building, and his spirit still roams somewhere behind the stage.