Hotel Management & Transactions 2026 Comparisons

Hotel transactions in Switzerland are governed by both private and public law.

Private law rests on two federal statutes: the Swiss Code of Obligations (CO) for contractual matters and the Civil Code (CC) for property rights. Both apply uniformly throughout the country.

Public law operates at three levels: federal, cantonal and municipal. At the federal level, two statutes are particularly relevant: the Federal Act on the Acquisition of Real Estate by Foreigners (known as the “Lex Koller”), which restricts the acquisition of real estate by foreign persons, and the Federal Act on Second Homes (known as the “Lex Weber”), which limits second homes in tourist areas. Both are implemented by cantonal authorities, and administrative practices vary between cantons.

Other relevant areas of law include:

• corporate law for share deal structures;
• tax law at all three governmental levels;
• licensing requirements for food service, alcohol sales and fire safety;
• employment law particularly regarding business transfers; and
• intellectual property law for branding and trade marks.

Both asset deals (direct transfer of real estate and/or business assets) and share deals (the sale of shares in the owning company) are common in Switzerland.

In an Asset Deal

• The sale of the hotel property (real estate) must comply with Swiss mandatory form requirements (the sales agreement must be notarised by a local notary and usually drafted in an officially recognised local language) and then registered in the local land register.
• The buyer acquires the property directly. Existing lease agreements and property insurance contracts are automatically transferred to the buyer by operation of law.
• Other commercial contracts (eg, hotel management agreements, franchise agreements) must typically be transferred individually.
• If the hotel business is transferred, employees are usually transferred under statutory rules on business transfer.

In a Share Deal

• The buyer acquires the shares and the target company remains the owner of the hotel, while the contracting party services the existing agreements and employment agreements – so operational continuity is often easier to preserve.
• The share purchase agreement (SPA) can be drafted in English and usually does not require notarisation. Only certain corporate changes must be filed with the commercial registry.
• This structure can be more flexible and less formal on the real estate side, but it may expose the buyer to historic and hidden liabilities at company level.
• A key structuring point is whether the property is held and operated by a single entity or if the property company (PropCo) and the operating company (OpCo) are separate, and whether the transaction involves one or both entities. Cross-border holding structures add further complexity.

The decision on structure is significantly influenced by real estate transfer tax exposure, capital gains tax treatment, stamp duties, existing financing arrangements and the desired degree of operational continuity.

Transaction confidentiality depends significantly on the chosen structure.

In an asset deal, certain information becomes publicly accessible through the land registry entry. This includes the plot description, the owner’s name, the type of ownership, the acquisition date and certain easements and encumbrances. However, the purchase price and other commercial terms generally remain confidential. An exception is the Canton of Geneva, where transaction prices are published in the cantonal gazette.

In a share deal, there is no land register transfer, allowing for greater confidentiality. However, changes to the board of directors at the target company level are registered in the commercial register and are therefore publicly accessible. Depending on the legal form of the target, shareholders are also recorded in the commercial register (in the case of a limited liability company or LLC, but not in the case of a corporation or public limited company (Aktiengesellschaft or AG). Further, Switzerland is in the process of introducing a beneficial ownership transparency register for holders of significant participations; however, access to such register will be restricted rather than fully public.

Parties that value discretion should factor these aspects into the structuring of the transaction.

The Federal Act on the Acquisition of Real Estate by Persons Abroad (Lex Koller), in force since the 1960s, regulates foreign investment in Swiss real estate.

Hotels operated as permanent business establishments within the meaning of Lex Koller are generally not subject to Lex Koller restrictions. Foreign investors can acquire such properties without prior authorisation. This exemption also applies to other commercial properties such as office buildings, retail premises, logistics facilities and shopping centres, and it applies regardless of whether the acquisition is carried out directly, via the purchase of the hotel properties (asset deal), or indirectly, via the purchase of the company holding the hotel assets, including the hotel properties (share deal).

Hotels that are operated according to a traditional business model usually qualify as a permanent business establishment according to Lex Koller. However, hotel businesses with alternative operating models deviating from the traditional hotel concept (eg, parahotel-like concepts) and mixed-use projects require careful case-by-case analysis. In some instances, due to their architectural design (eg, personalised living spaces instead of standardised hotel rooms, a fully equipped kitchen and a washing machine/dryers in the rooms to ensure a long-term stay on the premises, etc) and/or due to their effective use (eg, guests typically staying for more than six months, with no, or only minimal, hotel services, such that the provision of residential space outweighs the provision of hotel-style services, etc), some hospitality businesses may qualify as residential premises rather than as permanent hotel business establishments under Lex Koller, therefore requiring prior Lex Koller authorisation. In addition, if a hotel includes serviced apartments intended for individual sale, or if significant portions of the plot remain undeveloped, authorities may also question the commercial character. In such cases, it is advisable to obtain a non-subordination ruling from the competent cantonal authority before closing.

Purely residential acquisitions of holiday homes or units in an apartment/hotel (aparthotel) by foreigners are subject to cantonal quotas. Some cantons give priority to hotel-related investments within these quotas. EU and EFTA citizens holding a Swiss residence permit (B permit) are not classified as foreign acquirers under the Lex Koller.

The Federal Council recently launched a consultation on tightening the Lex Koller regulations. Among other things, this involves restricting the purchase of commercial property by foreign nationals; under the new rules, such property would only be available for purchase by foreign buyers if they intend to use it themselves. Such a restriction would mean that foreign buyers in Switzerland would only be able to purchase hotel properties if they use them themselves (ie, if they are owner-operated or, at most, operated under a management contract).

It is currently unclear whether such a tightening of the law will actually be implemented. Following the consultation, the draft may still be revised and would subsequently have to be approved by the Swiss parliament. Over the last ten years, there have already been very similar efforts to tighten the Lex Koller which, however, ultimately failed in parliament.

Structures

In Switzerland, hotels are typically operated under one of four structures, which differ mainly in who runs the day-to-day business, who carries operating risk, and how (and by whom) the hotel is branded. In market practice, leases are very common, particularly where owners (including institutional owners) prefer predictable income and to shift operational risk to the operator.

Privately owned/owner-operated hotels are particularly common in rural areas and resort destinations. The owners, often families, manage operations directly. The owner retains full operational control, and bears the full operational risk and reward. This model requires comprehensive expertise across all operational areas.

Agreements

Lease agreements

Lease agreements represent the dominant structure. The owner leases the property to an operator who pays rent (fixed, revenue-linked or a combination) and bears the operational risk. The owner is generally passive (focusing on asset-level protection) and receives stable income. Swiss tenancy law applies, including certain mandatory protections.

Management agreements

Management agreements are less common than leases, partly due to regulatory constraints on institutional investors, particularly real estate funds. They are more frequent in the urban luxury segment. The owner retains ownership while the manager operates the hotel for performance-based fees. The owner typically bears the operating profit and loss and therefore the business risk. The key difference in the lease is that the owner retains the economic exposure and also usually retains more “strategic” rights (budgets, capital expenditure (capex), brand standards, etc).

Franchise agreements

Franchise agreements are regularly used to secure brand affiliation. They are often combined with lease structures – the owner leases to a white-label operator who separately enters into a franchise agreement with an international brand. This provides access to reservation systems, brand recognition, loyalty programmes and operational support.

Hotel management agreements are still not widely used in Switzerland. Regulatory constraints on many institutional investors mean that hotel management agreements tend to appear mainly where property is held by private or foreign owners with experience in the hotel sector.

Under Swiss law, there is no special statutory regime for hotel management agreements. They are typically structured as hybrid contracts, combining elements of a lease (depending on the allocation of operating risk), IP/licences and mandate/services.

Commercially, hotel management agreements commonly allocate day-to-day operational responsibility to the operator/manager (including brand standards, standard operating procedures and access to reservation/IT systems), while reserving certain approval rights, transparency rights and asset-level controls for the owner. Typical fee structures consist of a base fee calculated on gross revenue and one or more incentive fees tied to profit or other performance indicators. The manager’s operational autonomy is balanced by detailed performance tests, reporting obligations and brand standards, and by clear allocation of capex and maintenance duties. Provisions on intellectual property, use of brands and systems, confidentiality, non-compete protections, subordination of the management agreement to financing, and dispute resolution (often arbitration in Switzerland) are standard.

Where staff are formally employed by the owner but directed operationally by the manager, employment contracts and the management agreement must clearly allocate instruction rights and extend employees’ loyalty and confidentiality obligations to the operator.

Management agreements do not automatically transfer with the property in an enforcement or sale scenario (in particular in asset sales) and non-disturbance agreements between owner, lender and operator are considered on a case-by-case basis and are not yet market standard.

Hotel lease agreements are governed by the Swiss Code of Obligations and the Federal Ordinance on the Rental of Residential and Commercial Property. Swiss tenancy law is tenant-friendly but allows greater contractual freedom for commercial leases. Swiss law distinguishes between ordinary leases (Miete) and usufructuary leases (Pacht). Conceptually, usufructuary leases are typically considered where the lessee not only receives the premises (and possibly movables) but also has the right to the “fruits/yield” of the business operated (ie, the operating income), which may become relevant in hotel settings depending on how the deal is structured (premises only versus premises plus business-related assets/rights and how the economic yield is allocated). Swiss case law emphasises that the classification turns on the substance of the transaction rather than labels. If the lease includes furniture, fixtures and equipment (FF&E) and the tenant operates the business, it typically qualifies as a usufructuary lease.

The typical contract term is long term in the range of ten to 20 years, often with renewal options of five years each (usually two to four five-year periods). Indexed fixed rents are common, while turnover-based rents are becoming increasingly popular, usually combined with an indexed minimum rent.

FF&E is often provided by the landlord, with a renewal fund accrued by the tenant for upkeep. Rental security typically amounts to six to 12 months’ rent. Maintenance and renewal obligations are defined in an interface document, with the landlord responsible for the shell and core and the tenant for fitting out. Triple-net leases are not that common in the Swiss hotel market.

Subletting and lease transfers require the landlord’s consent, which cannot be unreasonably withheld.

There is no specific franchise legislation in Switzerland; general contract law applies, in particular the Swiss Code of Obligations. Franchising is often combined with lease structures – the owner leases to an operator who separately enters into a franchise agreement with an international brand. This arrangement enables brand access without direct ownership involvement by the franchisor. The key contractual elements include brand and trade mark licences; operational standards and manuals; training and support obligations; fee structures comprising entry fees, ongoing royalties and marketing contributions; territorial and exclusivity rights; and contract term and renewal conditions.

Several legal aspects require attention. Competition law requires scrutiny of non-compete and exclusivity clauses. Trade mark protection must be secured through robust registration of trade marks. Clear termination provisions are essential, particularly regarding the consequences of early termination, post-termination non-compete obligations, and the fate of the franchisee’s investments. In addition, data protection obligations under the revised Federal Act on Data Protection (FADP) should be addressed, especially where guest data is shared between franchisor and franchisee across borders.

Hotel financing in Switzerland relies primarily on traditional bank lending, although market conditions are evolving.

Mortgage-secured loans from Swiss banks remain the dominant form of financing. Security typically consists of mortgage certificates (Schuldbriefe) on the property, often supplemented by an assignment of rental income and, in some cases, a pledge of shares in the property-owning entity. The Swiss Hotel Credit Corporation (Schweizerische Gesellschaft für Hotelkredit or SGH), a federally backed institution, provides (subordinated) loans at preferential rates for hotels, particularly in tourism regions. It also offers advisory services.

Current market conditions are challenging. The UBS-Credit Suisse merger has consolidated the lending market, and Basel III (respectively Basel IV) requirements have tightened collateral standards leading to higher equity requirements and more conservative loan-to-value ratios. Traditional hotel financing has become more difficult and expensive, particularly for larger transactions. Emerging trends include sale-and-leaseback structures, mezzanine financing (SGH loans), third-party capital solutions and an increased lender focus on ESG credentials, operator track record and long-term occupancy commitments.

There are no general restrictions on foreign lenders for commercially used hotel properties. Hotels qualifying as commercial establishments are exempt from the Lex Koller (see more on the potential tightening of the Lex Koller, however, in 2.3 Restrictions on Foreign Acquisition). Foreign banks can therefore take mortgage security without regulatory obstacles.

For properties subject to the Lex Koller, such as mixed-use developments with a residential component, foreign financing remains possible provided it mirrors Swiss banking standards. This includes a loan-to-value ratio below 80%, a standard security package and market-standard documentation. Typical security consists of mortgage certificates on the property, together with an assignment or pledge of rental income.

Tax consequences vary significantly depending on the transaction structure and canton. In some cantons, real estate gains are taxed under the ordinary corporate income tax regime whereas in other cantons, they are subject to a separate (typically higher) real estate capital gains tax (Grundstücksgewinnsteuern).

Capital Gains Tax

In an asset deal, real estate transfer tax and potentially real estate capital gains tax apply directly. In a share deal, the participation exemption may shelter gains at the federal level. However, if the target company qualifies as a real estate company (Immobiliengesellschaft), cantonal real estate transfer tax and real estate capital gains tax may still apply. Integrated hotel companies that combine property and operations in a single entity typically do not qualify as real estate companies. By contrast, separated PropCo/OpCo structures risk this classification. What is decisive is the company’s actual business activity and the proportion to which the company’s assets consist of (Swiss) real estate. Real estate capital gains tax is often the largest tax burden in hotel transactions. Rates vary by canton and municipality. Further, the holding period is crucial: holding periods of less than one year can trigger rates exceeding 50%, while holding periods of more than 25 years may reduce the burden to below 5%. Importantly, this tax may attach as a statutory lien on the property, which buyers should address in the due diligence and transaction structuring.

Transfer Tax, Federal Stamp Duty and VAT

Many cantons levy a real estate transfer tax (Handänderungssteuer) of 1–3%, which may also apply to share deals involving real estate companies, depending on the canton. In addition, federal stamp duty of 0.15% may apply to the transfer of Swiss securities, which is relevant in share deal structures. The parties to an asset deal can, under specific circumstances, elect to submit a transaction to VAT. This can in certain cases also be settled via the notification procedure, whereby the buyer assumes the seller’s VAT position, avoiding the need for the actual payment and recovery of VAT. The standard VAT rate in Switzerland is 8.1%, while accommodation services are subject to a reduced rate of 3.8%.

Managed and Leased Hotel Structures

Regarding managed and leased hotel structures, management fees and franchise royalties paid to an international operator/franchisor are not subject to Swiss withholding tax as such, but must be at arm’s length if paid to a related party; fees above arm’s length may qualify as a hidden dividend distribution and trigger 35% Swiss withholding tax. Cross-border management fees and franchise royalties received in Switzerland are subject to the Swiss reverse charge mechanism (Bezugsteuer) at the recipient’s location, provided the foreign service provider is not registered in the Swiss VAT register. Lease payments under a hotel lease are generally not subject to VAT (as the lease of immovable property is VAT-exempt), though the parties may opt to pay VAT where advantageous, to recover input tax deduction (Vorsteuerabzug). It is important to distinguish between the exempt lease of the hotel building to an operator and the taxable accommodation services provided by the operator to guests, which are subject to the reduced VAT rate of 3.8% for the hotel industry.

Tax Relief

Switzerland does not offer a dedicated tax (incentive) regime for hotel projects. However, companies – including hotel operators – may qualify for tax relief (tax holidays) under Swiss regional policy legislation if they invest in structurally weak regions. At the same time, combined Swiss corporate income tax rates are competitive by European standards at 12–22% effective rate (averaging approximately 15% on a combined federal, cantonal and communal level), and accommodation VAT is subject to the preferential rate mentioned above.

Specific zoning in Switzerland is governed at the cantonal and municipal level, meaning classifications and procedures vary considerably across the country.

Hotels are generally permitted in city centre zones, mixed-use zones and dedicated hotel zones. Some municipalities also allow hotels in residential zones, while others restrict them to special zones. Dedicated hotel zones, found particularly in Alpine tourism municipalities, often serve a protective purpose, preventing conversion to residential use and preserving tourism infrastructure. In cantons such as Graubünden and Valais, cantonal legislation reinforces this objective by imposing restrictions on the withdrawal of hotel properties from their designated use (Zweckerhaltung).

If the existing zoning does not permit hotel use, two options are available. First, an exception (Ausnahmebewilligung) within the existing zoning framework may be sought, though such derogations are rarely granted and typically require the applicant to demonstrate that the project does not conflict with the purpose of the applicable zone and that there are compelling reasons justifying a departure from the plan. Alternatively, a formal rezoning (Umzonung) can be applied for, which requires a lengthy public planning procedure involving consultation, public participation and approval by the municipal legislature or assembly, and is therefore both lengthy and politically sensitive. If rezoning is successful, a betterment levy (Mehrwertabgabe) may be triggered.

Hotel construction and refurbishment in Switzerland are governed by a combination of federal, cantonal and municipal regulations. While federal law sets minimum standards in areas such as fire protection and accessibility, the detailed building and zoning rules are determined at the cantonal and municipal level.

Land Use

Local regulations specify the maximum use of land, for example, by defining floor area ratios (Ausnützungsziffern) and maximum building heights. Some cantons grant density bonuses (Ausnützungsboni) for hotels or for the provision of underground parking. Heritage protection rules (Denkmalschutz) may impose additional constraints on refurbishment projects, particularly in historic town centres and Alpine resorts, where facade preservation or integration with the existing streetscape may be required.

Parking requirements for hotels are primarily governed by local building and zoning regulations and cantonal guidelines; the location class is a decisive factor and central locations reduce the requirement.

Fire Protection Requirements

Hotels are categorised by capacity and are subject to corresponding fire protection requirements under the guidelines issued by the Association of Cantonal Fire Insurance Institutions (VKF/AEAI). These cover fire-resistant materials, fire compartmentalisation, detection and suppression systems, escape routes and staff training. Hotels above certain capacity thresholds are classified as buildings with a high density of occupants (Gebäude mit hoher Personenbelegung), triggering enhanced requirements such as sprinkler systems and fire safety concepts prepared by qualified engineers. These standards can significantly influence room layouts. Hotels must comply with accessibility requirements for persons with mobility and sensory impairments. This covers entrances, circulation areas, rooms and sanitary facilities. A minimum proportion of rooms must be designed as barrier-free, with the exact number depending on total room count. Exceptions are possible under the principle of proportionality.

Health and Safety Regulations

Health and safety regulations further require compliance with cantonal food safety laws for hotel restaurants, noise protection standards under the Federal Noise Abatement Ordinance (LSV), and workplace safety rules enforced by SUVA (Schweizerische Unfallversicherungsanstalt) and cantonal labour inspectorates. Long-stay accommodation is generally classified as residential use, meaning that stricter noise control regulations must be observed.

The building permit (Baubewilligung) procedure begins with the submission of the application to the municipal or cantonal authority, accompanied by architectural plans, a site plan, technical specifications and, for larger projects, an environmental impact assessment (Umweltverträglichkeitsprüfung) where required under federal law. In the first phase, the authority circulates the application and obtains opinions from specialist departments for fire protection, accessibility, heritage and environmental matters. Negative opinions require project amendments; conditional approvals become binding conditions (Auflagen) in the permit. For projects in protected areas or involving listed buildings, approval from the relevant heritage authority (Denkmalpflege) is required, which may entail design modifications or the preservation of specific building elements.

The application is published in the official gazette, typically with a 30-day objection period (see 6.4 Objections to Building Permits). After processing any objections, the authority issues the building permit.

Duration of Process

The duration of the procedure varies considerably. Simple interior renovations can be completed within a few months. Complex new builds or major refurbishments involving changes to the building envelope or use require one to two years or more. In the event of objections and appeals, the procedure can extend over several years. Early engagement with the relevant authorities through a preliminary consultation (Voranfrage or Vorprüfung) is strongly recommended, as it can identify potential obstacles before the formal application is filed and significantly reduce the risk of delays.

Any person or legal entity materially affected by a project may file an objection (Einsprache) during the publication period. Standing requires proximity to the construction site (often direct line of sight to the project) and a legitimate interest. For purely internal works, neighbouring third parties will generally lack standing, as they cannot demonstrate a sufficiently direct impact on their own property or interest.

In addition, nature and environmental conservation organisations operating nationwide and recognised by the Federal Council under Article 12 of the Federal Act on the Protection of Nature and Cultural Heritage (NHG) can lodge appeals against official decisions on certain categories of construction projects, particularly where environmental impact assessments are required or where projects affect protected landscapes, habitats or cultural heritage sites.

To minimise objection risks, early engagement with neighbours before filing the application is advisable; informal information events or individual consultations can build goodwill and identify concerns that can be addressed in the project design. Full compliance with all applicable regulations and planning standards eliminates technical grounds for objection. Where objections are nonetheless filed, negotiations with objectors, potentially including certain concessions, can lead to the withdrawal of objections through a settlement. For interior refurbishment projects, documentation demonstrating the absence of external impacts such as noise, traffic or visual changes is helpful. Unsuccessful objectors may appeal the permit decision to the cantonal administrative court and, in some cases, to the Federal Supreme Court. This can delay projects by years.

Many municipalities have enacted zoning regulations to protect hotel stock, including dedicated hotel zones (Hotelzonen) that restrict the use of designated properties to hotel and hospitality operations and prevent conversion to purely residential or commercial use. Cantonal legislation in key tourism cantons such as Graubünden and Valais further reinforces this through use-preservation requirements (Zweckerhaltungspflicht), which may require official authorisation before a hotel property can be withdrawn from its designated use.

The most significant restriction arises from the Federal Act on Second Homes (Zweitwohnungsgesetz, known as Lex Weber), which applies to municipalities with more than 20% second homes – effectively all Alpine tourist destinations. It substantially restricts the conversion of hotels to residential use. For hybrid projects such as branded residences and serviced apartments, genuine hotel characteristics must be maintained to avoid classification as second homes under Lex Weber. These include public bookability, short-term rentals and integration into a professional hotel operation. The Federal Supreme Court has developed increasingly detailed case law on these criteria, and careful structuring – including the drafting of operating regulations, booking obligations and management agreements – is essential to ensure compliance. Any change of use from hotel to non-hotel purposes in affected municipalities also requires a building permit, and the authorities will scrutinise whether the proposed use is consistent with the Lex Weber and applicable zoning.

Conversely, conversions to hotel use are gaining significance, particularly the transformation of office space in cities. The benefits include reduced construction costs, potentially simpler permitting procedures and ESG advantages.

Heritage preservation in Switzerland is governed at the cantonal and municipal level, with the Federal Act on the Protection of Nature and Cultural Heritage (NHG) providing the overarching framework. Many historic hotels, particularly those in prime locations, such as grand Alpine hotels, lakeside palace hotels and urban landmark properties, are subject to heritage protection. Protection typically covers facades and external appearance but may also extend to interiors such as staircases, ballrooms and historic fixtures, original flooring, and ceiling frescoes. The scope of protection varies according to the level of designation and the canton.

Heritage protection may prohibit demolition, restrict vertical extensions and require heritage authority approval for material alterations, including changes to building services, windows and roofing materials. Where a hotel is listed on a cantonal inventory or classified as a protected monument (geschütztes Baudenkmal), even routine maintenance and refurbishment works may require prior consultation with the heritage authority. Conflicts frequently arise between heritage requirements and modern building standards – for instance, fire protection upgrades, energy efficiency measures and accessibility modifications may be difficult to reconcile with preservation obligations, requiring tailored solutions developed in co-ordination with the Denkmalpflege.

Investors should clarify the protection status of a project early on, through a review of the relevant cantonal inventory of protected buildings, and engage with heritage authorities before finalising development plans to understand the permissible scope of interventions.

The operation of a hotel in Switzerland does not require a single, unified federal operating licence. Instead, licences are regulated at cantonal level, and the applicable requirements depend on the services offered by the hotel. In particular, the preparation and serving of food as well as the sale of alcohol are subject to cantonal and municipal licensing requirements. Additional permits may be required for ancillary hotel facilities such as spas and wellness areas (potentially subject to cantonal health and hygiene regulations), swimming pools, event spaces exceeding certain capacity thresholds, and outdoor terraces or garden restaurants (Gartenwirtschaft).

The procedure for obtaining the principal operating licence typically involves submitting an application to the competent cantonal (or municipal) authority, providing proof of professional qualifications (certificate of competence), submitting plans of the premises and confirming operational responsibility. In some cantons, the responsible manager must be resident in the canton and may not simultaneously manage another licensed establishment. For new buildings, the occupancy permit must be presented before the operating licence can be issued, confirming that the premises comply with fire protection, accessibility and building safety standards.

The granting of the operating licence is published in the official gazette. The licence is generally tied to the specific premises and the designated responsible manager; a change in either – such as a sale of the business or a change in management – requires a new application or a formal transfer (Übertragung) of the licence.

Switzerland has developed a robust framework of sustainability standards relevant to hotel construction and operation. Minergie is the leading Swiss certification for energy efficiency and indoor air quality. In some cantons, Minergie certification can unlock planning advantages such as higher floor area ratios. International standards such as Leadership in Energy and Environmental Design (LEED) certification are used by hotels seeking globally recognised sustainability certification. ESG factors increasingly influence both hotel operations and investment decisions in the Swiss market. Energy management, sustainable procurement, biodiversity and community engagement are increasingly expected and are no longer optional. Lenders and investors are demanding demonstrable ESG commitments. ESG criteria are being embedded in operator agreements and financing conditions, including reporting obligations on carbon emissions, energy intensity per room night, water consumption and waste management metrics.

Transfer of Undertakings

Acquisitions that include hotel operations (not just the property) trigger the rules on transfer of undertakings under Articles 333 and 333a of the Swiss Code of Obligations (OR). This applies to asset deals and operational takeovers; a pure share deal does not constitute a transfer of undertaking, as the employer entity remains unchanged. Employment contracts transfer automatically to the buyer; individual consent is not required. Employees may refuse the transfer. In that case, the employment relationship terminates after the statutory notice period (which may be shorter than the contractual period). During the notice period, both parties must fulfil their obligations. The buyer assumes all employment terms including seniority and accrued vacation entitlements.

Employment Matters

Collective bargaining agreement

An applicable collective bargaining agreement (Gesamtarbeitsvertrag or GAV) remains binding for one year after the transfer, unless it expires or can be terminated earlier. The hospitality industry is subject to a sectoral collective bargaining agreement (Landes-Gesamtarbeitsvertrag des Gastgewerbes or L-GAV) that applies to establishments that provide accommodation for a fee or serve food and beverages for on-premises consumption. It regulates minimum salary, 13th month salary, working hours, holidays, probation and termination.

Dismissal

The transfer rules do not create enhanced protection against dismissal. The buyer may change terms or dismiss employees with proper notice – provided the dismissal is not made solely to circumvent the transfer rules. However, if as a result of the proposed transfer, measures affecting the employees are planned (eg, dismissals, wage cuts, etc), the employees’ representative body (or, if there is none, the employees) must be consulted in good time prior to a decision being taken on these measures. The seller and buyer are jointly liable for employee claims that arose before the transfer and that become due up to the first ordinary termination date.

Contracts

From a transaction structuring perspective, buyers should also consider that hotel operations typically involve a high proportion of employees on hourly, seasonal or on-call contracts, as well as cross-border commuters (Grenzgänger) in border regions. Each category may raise specific issues under Swiss employment, social security and immigration law that should be addressed in due diligence and reflected in the acquisition documentation through appropriate representations, warranties and indemnities.