Originally built by the Bader family as a scythe smithy in 1800 the building was first turned into an inn and then, in 1890, it was extended to become the Palace Hotel. Until World War I the house was mainly visited by national and international nobility; afterwards regular guests from industrial tycoons came to appreciate its luxurious style.

After the start of World War II the heydays of the hotel came to an abrupt end. The hotel was confiscated and converted into a military hospital. When Georg Bader junior returned from the war in 1947 he rebuilt the hotel in a very short time. In the 1950’s the house accommodated a finishing school amongst other things before returning to being used wholly as a hotel at the beginning of the 1960’s due to the increase in international tourism. After the death of Georg Bader in 1976 his wife continued to manage the hotel until she sold it to a close confidant of the Sultan of Oman, a regular guest at the hotel, in 1976. Since August 2010 the hotel has been managed by Monaco Luxury Hotels & Resorts with its registered office in Switzerland.