The owners of an Austrian four-star hotel who took one of their visitors to court over his online review criticising the portrait of a “Nazi grandpa” in its lobby have dropped the case because the guest managed to unearth evidence showing their relative had in fact been a member of the Nazi party.

The German guest, named in court documents as Thomas K, had posted critical reviews on Booking.com and TripAdvisor about a week after his visit to the Ferienhof Gerlos hotel in the Tyrolean Alps in August 2018.

After check-in, K and his wife noticed two framed pictures on a wall near the hotel’s entrance, hung above a flower arrangement. One showed a young man wearing a uniform with an eagle and swastika badge, the other an older man.

In his online review K said he had felt disgusted to see a National Socialist publicly venerated at the hotel, using the subject header “At the entrance they display a picture of a Nazi grandpa”.

The owners of the hotel asked the travel websites to remove reviews and took K to court, on the grounds that the description “Nazi grandpa” was libellous and defamatory because the people in the pictures – one a grandfather, the other an uncle of one of the owners – had only been members of the Wehrmacht, the armed forces of Nazi Germany from 1935 to 1945.

They succeeded in July in obtaining a gagging order against K after the regional court in Innsbruck ruled that their interest in protecting their reputation took precedence over the guest’s right to freedom of expression.

However, by researching the identity of the two men in the photographs at the German National Archives in Berlin in May this year, K found proof that both of the men had in fact joined the Nazi party, in 1941 and 1943 respectively.

Last month, the Innsbruck court decided to lift the gagging order.

The two men’s party membership and the clearly visible swastika, the court said, amounted to sufficient proof to back up the guest’s complaint that the hotel had “uncritically venerated a former Nazi family member”.

The hotel’s owners, who say they had not been aware of their relatives’ party membership, will likely have to pay their former guests’ legal costs of about €10,000 (£8,350).