Elmau Castle, nestled in the Bavarian Alps, is a five-star resort that will be transformed into a fortress for the two-day meeting of the club of rich nations.
If the forecast for sunny, hot weather holds, the German leader can look forward to an enchanting backdrop for the meeting that will have on the agenda the world's most pressing crises.
US President Barack Obama has agreed to a village walkabout on Sunday among the feather-capped farmers and dirndl-clad women who make Bavaria famous, complete with a stop for a soft pretzel and frothy beer.
G7 presidents typically choose picture-postcard spots when planning their annual summit, ideally in a remote location that is easier for police to secure than an urban centre. Merkel was no exception.
"We want to show our guests a beautiful corner of Germany and we are meeting in such a place -- it is an important aspect for the success of these type of summits," she said recently.
But Merkel has also said that she picked the spot for the way the castle's proprietors have owned up to its Nazi-era history.
Protestant theologian and philosopher Johannes Müller built the castle during World War I and when Adolf Hitler rose to power in 1933, Müller pledged allegiance to the new Führer although he never joined the Nazi party.
But he openly criticised the Nazis' rabid anti-Semitism as a "disgrace for Germany", according to the hotel's website, which it says led to tight surveillance by the Gestapo.
Home for Holocaust survivors
After the start of World War II, he prevented his beloved hotel from being seized by the Nazi top brass for their own use by renting it out to the German army as a resort for soldiers on leave from the front.
Müller faced prosecution after the war for "glorification of Hitler both verbally and in writing" and was convicted and lost ownership of the hotel.
Schloss Elmau served as a US army hospital and later as a refuge for displaced people and Holocaust survivors in the immediate post-war years.
Merkel's office noted last year when she selected the venue that it now frequently hosts "events that contribute to German-Israeli and German-American understanding", including lectures and debates.
The sumptuous accommodation comes complete with 123 rooms and suites, swimming pools and spas.
To maintain security, high-level guests will be whisked by helicopter to the castle, while a ring of steel will keep the expected tens of thousands of anti-G7 protesters at bay in the ski resort town of Garmisch-Partenkirchen, 15 kilometres (nine miles) down the road.
Bavaria estimates the total cost of the two-day gathering will reach €130 million, with around 25,000 police officers deployed to keep the peace.
The state is hoping for a powerful knock-on effect for tourism. Local leaders are even lighting up nearby Neuschwanstein Castle, the inspiration for Disneyland's Sleeping Beauty palace, in the colours of the G7 countries.