Hotel Terrace is in Sachseln, a village in the canton of Obwalden, central Switzerland, on the shore of Lake Sarnen. The village is known for the Parish Church of St. Theodul and Nicholas of Flüe, which holds the relics of Saint Nicholas of Flüe, Switzerland's patron saint and a figure associated with the country's national unity.
Surrounded by the pre-Alps, between Lucerne and the higher Alpine passes, Sachseln keeps the traditional chalet architecture typical of the region and serves as a gateway to the Melchtal valley and nearby ski areas.