Palace Resorts - Operational Updates

HURRICANE DEAN UPDATE

August 21, 2007

5:00 P.M. EST - After a thorough inspection of all properties, very few damages were reported. Most damages include some broken windows, palm tree branches down, and debris from wind gusts around common areas. Following is a recap per property:

Moon Palace Golf & Spa Resort

Resort is open and currently accepting guests.
Nizuc section pool is open. Sunrise section pool is being cleaned and will reopen tomorrow.
All indoor restaurants and bars are open
Outdoor restaurants will open tomorrow
Moon Spa & Golf Club opened today at 2:00pm
Paintball area will reopen tomorrow
Beach and beach lounge bar are being cleaned and will be ready in approximately 4 days

Cancun Palace

Resort is open and currently accepting guests
Rooms were unaffected
Pools and bars are operating
All restaurants are open. Mercado Restaurant (International) is only operating indoors. The outdoor terrace is currently closed
Lobby, gym and kids club are open and operating
The amphitheater, beach snack/bar as well as the beach and sunbathing area are not currently open

Sun Palace

Resort is open and currently accepting guests
There were no damages to the property and the resort is operating at 100%

Aventura Spa Palace

Resort is open and currently accepting guests
Rooms were unaffected
All pools and restaurants are operating
Outdoor spa suites and Beach coves are not operating and are currently being cleaned

Playacar Palace

All areas are 100% operational except the pool. The pool is currently being cleaned. The resort is expected to open on Friday, August 24th
Guests scheduled to arrive today and tomorrow will be accommodated at Moon Palace Golf & Spa Resort
Playacar Spa & Golf Club will open tomorrow

Xpu-Ha Palace

The resort is expected to reopen Saturday, August 25th in order to clean the beach and beach bar area.
Guests scheduled to arrive from today until Friday will be accommodated at Moon Palace Golf & Spa Resort

Cozumel Palace

The resort will reopen tomorrow with all areas operating at 100%.
Guests scheduled to arrive today will be accommodated at Moon Palace Golf & Spa Resort

Beach Palace

No major damages. The resort is still on schedule to open on December 1, 2007

Isla Mujeres Palace

No major damages. The resort is still on schedule to open fall 2007

General information:

Tours: The tours of Chichen-Itza, Tulum, Ekbalam, Coba and Wet N’ Wild will begin operating as of Thursday. It is uncertain as to when the remaining tours will be operating.
Cancun International Airport is open and operating as normal; however, there are still some cancelled flights. Please check with your airline for updated flight information
Cancellations: are being accepted without penalty for all arrivals from August 18th thru August 22nd
Rescheduling: If guests wish to postpone their vacation and travel at a later date, we will protect original rate for travel up to one year after original departure date. Guests will be allowed to travel from August 22, 2007 thru August 22, 2008. (Except the dates from December 15, 2007 thru January 3, 2008). Bookings must be rescheduled within 30 days after a hurricane strikes. Based on availability and black out periods apply. Rate protection will only apply to the number of original nights and number of guests booked. (Additional nights or guests will be booked at current rate). No name changes allowed.
No Show: No Show penalties will also be waived up for all scheduled arrivals from August 18th thru August 22, 2007
Early Departures: Guests departing early between August 18th and August 21st will be provided with a return stay certificate for the number of unused nights. Guests should contact the travel professional they booked their reservation with after August 27th.

Current weather conditions are partly cloudy and windy. We will continue to update you as more information becomes available.

11:00 A.M. EST - Hurricane Dean made landfall north of Chetumal at around 4:30am. Along the northern Yucatan coast, winds reached tropical-storm force. Conditions in the Cancun, Riviera Maya and Cozumel are favorable and no significant damages were reported. The hurricane is now crossing the Yucatan Peninsula and has lost significant strength to a category 2 storm.

As preventive measures, Aventura Spa Palace guests were moved to the on-site shelter where they had food and water. Guests have already returned to their rooms.

Palace Resorts did not suffer any significant damages either. Most restaurants are open and guests are calm. Clean up to common areas, pools and beaches have already begun. Current weather conditions are cloudy with some rain and windy.

We will continue to update you as more information becomes available.

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August 20, 2007

3:00 P.M. EST - Hurricane Dean is now located 18.0 N 83.2 W and is moving toward the west near 21 mph. Maximum sustained winds remain near 150 mph with higher gusts. Dean remains a category 4 hurricane on the Saffir-Simpson scale.

There has been a significant change to the track of the storm and it appears that Dean is no longer a direct threat to Cancun, Riviera Maya and Cozumel. A Hurricane Warning remains in effect for preventive reasons; however the impact that it will have in northern Quintana Roo is expected to be minimal.

Current weather conditions in Cancun and Riviera Maya are partly cloudy and hot. All activities at Palace Resorts remain normal and guests are calm. Restaurants and bars at all resorts are open.

Palace Resorts is taking appropriate measures to ensure the safety of our guests. We will keep you informed as more information becomes available.

12:00 P.M. EST - Hurricane Dean is now located 17.9 N 82.4 W and is moving toward the west near 21 mph; a westward or west-northwestward motion is expected over the next 24 hours. Maximum sustained winds are near 150 mph with higher gusts. Dean remains a category 4 hurricane on the Saffir-Simpson scale.

As a safety precaution, guests staying in Playacar Palace and Xpu-Ha Palace will be evacuated today to the Moon Palace in Cancun. Guests in Aventura Spa Palace will not be evacuated since there is a shelter on property.

There will be no cancellation or no-show penalties for guests scheduled to arrive today.

It is projected that the hurricane will no longer have a direct impact in Cancun and only Tropical Storm effects are expected. We will keep you informed as more information becomes available.

10:00 A.M. EST - Hurricane Dean is now located 17.8 N 81.5 W and is moving toward the west near 21 mph; a westward or west-northwestward motion is expected over the next 24 hours. There is a Hurricane Warning in effect for the east coast of the Yucatan Peninsula. A Hurricane Warning means that hurricane conditions are expected within the warning area within the next 24 hours. Maximum sustained winds are near 150 mph with higher gusts. Dean remains a category 4 hurricane on the Saffir-Simpson scale.

According to the latest forecast, the current track is moving southward towards Tulum, Mahahual and la Isla de la Ascensión and will not have a direct hit in Cancun and the Riviera Maya. The Governor of Quintana Roo declared the state is under “Orange alert” which indicates that there is an “imminent hurricane threat” to the area. As more information becomes available regarding Dean and how it will affect Palace Resorts in Cancun, Riviera Maya and Cozumel, we will post it in this section.

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August 19, 2007

6:00 P.M. EST - Hurricane Dean is now located 17.3 N 76.8 W and is moving toward the west near 20 mph. There is now a Hurricane Watch in effect for the Yucatan Peninsula. A Hurricane Watch means that hurricane conditions are possible, within the watch area generally, within 36 hours. Maximum sustained winds are near 145 mph with higher gusts. Dean remains a category 4 hurricane on the Saffir-Simpson scale. We will keep you informed as more information becomes available.

8:00 A.M. EST - Hurricane Dean is now located 16.8 N 74.3 W and is moving toward the west-northwest near 18 mph; this general motion is expected to continue for the next 24 hours. It seems that the storm has weakened and its track has shifted slightly southward. Maximum sustained winds are near 145 with higher gusts. Dean remains a category 4 hurricane on the Saffir-Simpson scale. As more information becomes available regarding Dean and how it will affect Palace Resorts in Cancun, Riviera Maya and Cozumel, we will post it in this section.

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August 18, 2007

8:00 P.M. EST - Hurricane Dean is now located 16.0 N 71.0 W moving toward the west near 17 mph. A westward or west-northwestward motion is expected during the next 24 hours. Maximum sustained winds remain near 150 mph. Dean remains a category 4 hurricane on the Saffir-Simpson scale.

Cozumel Palace guests will be evacuated tomorrow, August 19th to the Moon Palace. Moon Palace’s Expo Center has been approved to be used as a shelter in the event of a hurricane. According to local sources, the Governor of Quintana Roo announced that the state is under “Green Alert” which means that there is a threat of a hurricane to the area. We will keep you informed as more information becomes available.

5:00 P.M. EST - Hurricane Dean is now located 16.1 N 70.2 W moving toward the west-northwest near 18 mph. Maximum sustained winds remain near 150 mph. Dean remains a category 4 hurricane on the Saffir-Simpson scale. As more information becomes available regarding the Yucatan Peninsula, we will post it in this section.

2:00 P.M. EST - Hurricane Dean is now located 15.9 N 67.4 W moving toward the west near 17 mph. Maximum sustained winds are near 150 mph. Dean remains a category 4 hurricane on the Saffir-Simpson scale. We will continue to update you as more information becomes available regarding our resorts in Cancun, Riviera Maya and Cozumel.

9:00 A.M. EST - Hurricane Dean is now 15.4 N 67.9 W moving toward the west near 17 mph. Maximum sustained winds are near 150 mph. Dean remains a category 4 hurricane on the Saffir-Simpson scale. We will continue to update you as more information becomes available.

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August 17, 2007

8:00 P.M. EST - Hurricane Dean is located 14.9 N 65.1 W moving toward the west near 19 mph and this motion is expected to continue through Saturday with a gradual decrease in forward speed. Maximum sustained winds have increased to at least 135 mph with higher gusts. Dean is now a category 4 hurricane on the Saffir-Simpson Scale. We will continue to update you as more information becomes available.

5:00 P.M. EST - Hurricane Dean is located 15.0 N 64.5 W moving toward the west near 21 mph and this motion is expected to continue through Saturday with a gradual decrease in forward speed. Maximum sustained winds are near 125 mph with higher gusts. Dean continues to be a category 3 hurricane on the Saffir-Simpson Scale. No hurricane watches have been posted for the Yucatan Peninsula as of yet. We will continue to update you as more information becomes available.

2:00 P.M. EST - Hurricane Dean is now located 14.8 N 63.6 W moving toward the west at 22 mph and this motion is expected to continue during the next 24hrs. On this track Dean is expected to move across the eastern Caribbean Sea today. Maximum sustained winds have increased to 125 mph with higher gusts. Dean has become category 3 hurricane on the Saffir-Simpson Scale. No hurricane watches have been posted for the Yucatan Peninsula as of yet. We will continue to update you as more information becomes available.

12:00 P.M. EST - Hurricane Dean is located 14.6 N 62.6 W moving toward the west at 21 mph and this motion is expected to continue during the next 24hrs. This track will keep Dean over the eastern Caribbean Sea today. Maximum sustained winds have increased to near 105 mph with higher gusts. Dean continues to be a category 2 hurricane on the Saffir-Simpson Scale. No hurricane watches have been posted for the Yucatan Peninsula as of yet. We will continue to update you as more information becomes available.

10:00 A.M. EST - Hurricane Dean is located 14.4 N 61.7 W moving toward the west near 23 mph and this motion is expected to continue with some decrease in forward speed during the next 24 hours. Maximum sustained winds are near 100 mph with higher gusts. Dean continues to be a category 2 hurricane on the Saffir-Simpson Scale. No hurricane watches have been posted for the Yucatan Peninsula as of yet. We will continue to update you as more information becomes available.

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August 16, 2007

5:00 P.M. EST - Hurricane Dean is located 14.0 N 56.5 W moving toward the west near 23 mph and this motion is expected to continue today. Maximum sustained winds have increased to near 100 mph with higher gusts. Dean has become a category 2 hurricane on the Saffir-Simpson Hurricane Scale. We will continue to update you as more information becomes available.

3:00 P.M. EST - Hurricane Dean is located 13.8 N 55.5 W moving toward the west near 23 mph and this motion is expected to continue today. Maximum sustained winds are near 90 mph with higher gusts. Dean continues to be a category 1 hurricane. We will continue to update you as more information becomes available.

11A.M EST - Hurricane Dean has formed in the Caribbean and is currently a category 1 storm. It is located 13.5 N 53.3 W and moving West at 24mph. As the storm develops it is still unknown how it will affect the resorts in Cancun, the Riviera Maya and Cozumel. No warnings have been posted to the Yucatan Peninsula as of yet. As more information becomes available we will post it in this section. For updated storm information, please visit www.weather.com or www.noaa.gov