ST.THOMAS, US VIRGIN ISLANDS— The owners of Grand Beach Palace in Smith Bay, St. Thomas, have announced that the resort will close permanently on Aug. 22, according to a local report, and previously planned renovations have been canceled. Mexico-based Palace Resorts reportedly plans to put the 26-acre property up for sale, canceling plans to apply for V.I. Economic Development Commission tax benefits and to invest $12 million for renovations. It was noted that Palace Resorts has had increasing difficulties with the hotel, formerly the Renaissance Grand Beach Resort, since acquiring it for $9.75 million in November 2003. After the purchase, Palace Resorts took over both ownership and management functions at the property from previous owner CTF St. Thomas Corp., which had contracted management of the resort to Marriott International Inc. Palace Resorts signature all-inclusive package price covering food, lodging, gratuities and entertainment was reportedly unpopular as guests disliked paying in advance for meals. It was noted that occupancy dropped to a low of 20%. Additionally, the hotel’s 293 employees were also said to be frustrated and moved to create a labor union. Labor organizers were reportedly trying to unionize employees when the company announced the hotel would close. The 290-room Grand Beach Palace was Palace Resorts first property in the Caribbean. The company owns 10 all-inclusive hotels in Mexico and is expected to open a 1,740-room resort next year in the Dominican Republic.
