Geneva and Lausanne are poised for a flood of anti-globalisation protesters during the G-8 summit in Evian, due to start on Sunday.
Some 10,000 soldiers and police officers are to be deployed in the lakeside region in the heaviest security operation since the Second World War.
Widespread disruptions to road and air traffic are expected during the three-day event in the French resort.
Boats on Lake Geneva are banned altogether, except for shuttles transporting high-ranking delegates to and from Lausane and Geneva to Evian.
Many public buildings, such as museums and libraries, will remain closed, along with many retail outlets - some of them already boarded up.
Meanwhile, the main hospitals in the region will have extra staff on standby to deal with any emergencies arising from the planned protests.
The threat of violent demonstrations in Lausanne and Geneva during the meeting has prompted many visitors to stay away from the two cities.
Bookings in Lausanne - just across the lake from Evian - are down 50 per cent.
Some hotels are closing altogether, while others are demanding police guarantees to protect buildings and guests.
Lausanne is playing host to more than 1,000 delegates attending the summit. However, swissinfo has found that many hotel owners say they have more to lose than gain from the event.
The highest-ranking members will be accommodated in two luxury hotels in the lakeside district of Ouchy at the foot of Lausanne and shuttled across to Evian by boat.
But the city authorities have decided to seal off Ouchy for the duration of the summit, leaving all other businesses in the area with no other choice but to shut up shop.
"We have to give vacation days to our employees," said Laurent Nicolier of the small, family-run hotel and restaurant "du Port".
Nicolier says his family was not asked to accommodate any G-8 guests, yet the hotel finds itself in the no-go zone, which means no other potential customers will be allowed to enter.
Early summer is usually a popular time of year for Ouchy, with locals and tourists normally flocking to the restaurants and cafes along the lakefront.
The summit also coincides with the public holiday to mark Ascension (May 29), but instead of being an additional boost for business a huge anti-globalisation demonstration is being planned in Lausanne.
Yannis Gerassimidis, manager of the Hotel Continental, fears the march could turn violent and his building vandalised.
Located in the centre of Lausanne across from the railway station, the hotel is not located inside the restricted zone.
He has written two letters to the authorities demanding security guarantees since tens of thousands of anti-globalisation protesters are expected to march through the centre of Lausanne, following a route which will take them past the Continental.
Reservations for the week of the summit are off by about half their normal levels for this time of year, as companies not involved with the summit try to avoid Lausanne.
Only one in every four rooms at the Continental has been booked and the Lausanne hotel association says the situation is similar across the city.
Jean-Yves Blatt says the summit is a mixed blessing for his five-star hotel, the Palace and Spa.
The Palace is one of three hotels outside Ouchy which has been asked to accommodate G8 delegations and their entourages.
As a result the Palace is almost fully booked but Blatt says Lausanne would be better off without the event.
He told swissinfo that the police had still not informed the hotel of the security measures they were going to take to protect the building and its guests.
The Palace management blames the police for not doing enough to prevent demonstrators from causing SFr100,000 ($77,600) in damage to the hotel during this year's traditional May Day march.
And the May Day demonstration pales in comparison with the size of the protest planned for Ascension Day.
Blatt says the city's business community fears the worst because Lausanne has never had to deal before with a protest on this scale.
swissinfo, Dale Bechtel
The G-8 summit is taking place in the French lakeside resort of Evian across from Lausanne from June 1-3.
Tens of thousands of anti-globalisation demonstrators are planning to march through Lausanne on May 29, followed by Geneva on June 1.
Many businesses, public buildings and services in the region are shutting down; road and air traffic are predicted to suffer delays.