Red Bay's depot and hotel were central to the town's growth and daily life. Built by Illinois Central Railroad in 1907, the depot brought necessities such as sugar, flour, cheese, and canned goods, as well as automobiles, hardware, farm implements, and machinery, and it handled local shipments of lumber, sand, cotton, and furniture. A small Illinois Central passenger train with three coaches, called the "Dude" or "Doodle Bug," provided the first dependable transportation for people in northwest Alabama and northeast Mississippi, while the City of Miami passed through Red Bay nonstop on its run from Chicago to Miami, and two local trains served the route between Corinth, Mississippi and Haleyville, Alabama for many years. The depot was a gathering place where people watched trains arrive and depart, children played in the park across the tracks, engines took on water from the nearby tower, travelers bought tickets with connections to distant places, families welcomed loved ones, soldiers left for war, and grieving families received the bodies of loved ones. Telegraph orders were sent and received there, passengers checked train times on a bulletin board, and people waited by the whistle and the potbellied coal stove until the last train passed through Red Bay in 1990; plans to move and preserve the depot ended when it mysteriously burned. The hotel stood on property dating to 1838, was first built in 1907 as the Central Hotel, was torn down in 1924, and was replaced by a new hotel called first Hotel Red Bay and later Red Bay Hotel. With 30 rooms, thick brick walls, furnished rooms, a dining room serving Southern meals, and shared social spaces including the lobby, porch, barbershop, and shoeshine stand, it hosted salespeople from Memphis and Birmingham, railroad inspectors, maintenance crews, boarders, teachers, construction workers, and touring entertainers connected with live stage shows at Bay Theater. Evenings brought games, conversation, and later television in the lobby, and the hotel remained a thriving business for many years before closing in 1977 under owner John Swindle, who later donated furnishings and architectural features to Red Bay Museum; the building was later purchased for restoration.