The town's initial function was as a railway hub, for Kimberley's diamond mines. However, in 1996 the railway station was closed, and the railway training college became a primary school. With work having dried up, Alicedale plunged into poverty.
In 2003 things began to change - in a joint initiative between the Eastern Cape government & the Mantis Collection of boutique hotels construction began on the Bushman Sands Hotel & Golf course. The old railway training college has been transformed into the Bushman Sand's reception centre. The railway houses are being used as accomodation, and the old station is now the hotel's conference centre.