Most accounts of Atlantic City’s history agree that the island’s first hotel opened in 1839 at what later became Baltic and Massachusetts Avenues. Before Atlantic City’s incorporation in 1854, the principal residents of Absecon Island were the Leeds family. Although visitors to the area were few in the early days, the presence of tradesman and oystermen convinced the family to open a tavern to serve them. Chalkley S. Leeds, the son of the island’s first settler Jeremiah and Atlantic City’s first mayor, later recalled, “…I built the Atlantic House, which I think was the first hotel ever erected on this beach. I added two wings to our old homestead, one being a three-story structure, 36 by 24, and the other a two-story addition, making about 15 rooms altogether.” This boarding house was operated by Jeremiah Leeds’ widow, “Aunt Millie” Leeds, until about 1853, when it was sold to the Camden & Atlantic Railroad Company. The railroad men, eager to establish a health and recreation resort on the island, were buying up the Leeds family’s land at the price of $17.50 an acre. Its role as a lodging establishment in the new Atlantic City is unknown, but it did serve as the city's first post office from 1854-1856. An entry in an 1875 business directory lists it under Atlantic City Hotels, though notes that it is unoccupied. Although Aunt Millie’s boarding house did not have a history as esteemed as some other early Atlantic City hotels, it still holds a place in history as the first lodging establishment on the island.  H009.647.94Old163 
 H.Bk.974.985Hal.231  This image has been labeled as Atlantic City's "oldest hotel" in books dating back to the first decade of the 20th century. However, its described location does not match that of the Atlantic House. It is possible that this was another of the Leeds' family's properties, and was the oldest hotel still standing at the time this photograph was published.
From the Atlantic City Heritage Collections, H009.647.94Old163.
 Another possibility for the Atlantic House is this image, described as the home of Chalkley Leeds. Given how long it has been since the hotel
disappeared from the city landscape, however,  a definitive answer may never be found.
From the Atlantic City Heritage Collections, H.Bk.974.985Hal.231.
 

For more information, see these resources in the Atlantic City Free Public Library, Atlantic City Heritage Collections:

Local History Subject Files – Hotels
“Annals of Absegami, Vol. 2” Heston Coll. 974.984Hes
City Directory - 1875
“Book of the Boardwalk,” Heston Coll. 974.985But