By the time David Kalākaua assumed the throne, the original ʻIolani Palace was in poor condition, suffering from ground termite damage.
He ordered the old palace to be razed.

Kalākaua was the first monarch to travel around the world.
While visiting Europe, he took note of the grand palaces owned by other monarchs.
Like Kamehameha V, he dreamed of a royal palace befitting the monarch of a modern state.
He commissioned the construction of a new ʻIolani Palace, directly across the street from Aliʻiōlani Hale, to become the official palace of the Hawaiian monarchy.
By the time David Kalākaua assumed the throne, the original ʻIolani Palace was in poor condition, suffering from ground termite damage. He ordered the old palace to be razed.
Kalākaua was the first monarch to travel around the world. While visiting Europe, he took note of the grand palaces owned by other monarchs. Like Kamehameha V, he dreamed of a royal palace befitting the monarch of a modern state. He commissioned the construction of a new ʻIolani Palace, directly across the street from Aliʻiōlani Hale, to become the official palace of the Hawaiian monarchy.
ʻIolani Palace