Received a promotion from hotel previously stayed. They are quoting currently exchange rate of 1 CHF to 1.20 Euro for bookings.

Seems sensible way to try and keep their European customers.

Have noticed in the past some hotels offer favourable rate against the Euro for their bookings.

Has anyone else noticed this?

Err... and the Swiss resident simply pays the amount in Euro, no?

PS: I assume you mean 1 Euro to 1.2 CHF.