Palace Resorts Continues to Grow in Cancun and the Riviera Maya; Extends Its Brand Name to Cozumel and Nuevo Vallarta

MIAMI - May 4, 2004 - Palace Resorts announces the purchase of four new properties in Mexico : Hotel Sierra Cancun; Hotel Continental Plaza Playacar; Hotel Plaza Las Glorias Cozumel; and Hotel Sierra Nuevo Vallarta. The hotels will continue to operate under their current names until the end of the year, when they will be integrated into the Palace Resorts brand and assume new names.

"2004 is a very important year for Palace Resorts. After our recent expansion to the Caribbean with Grand Beach Palace in St. Thomas, USVI, we are continuing to strengthen our all-inclusive resort chain in Mexico, and giving our clients the opportunity to enjoy the quality of a Palace property in new destinations in Mexico," said Roberto Chapur, President of Palace Resorts.

All new properties will be upgraded to the standards of Palace Resorts, including the renovation of rooms, lobbies, and other common areas as necessary. In addition, the two European Plan properties, Hotel Continental Plaza Playacar and Hotel Plaza Las Glorias Cozumel, will be converted to the all-inclusive plan in 2005.

The new resorts offer a unique getaway to travelers and new options to Palace Resorts clientele. The Hotel Sierra Cancun with 260-rooms is located in the heart of the hotel zone, within walking distance to Cancun's exciting nightlife and attractions. Hotel Continental Plaza Playacar with 185 rooms is set on one of the most beautiful beaches and just steps from Palace's renowned Golf Course at Playacar. Hotel Plaza Las Glorias Cozumel with 174 rooms is located within walking distance to Downtown San Miguel and it's a divers paradise offering snorkeling and diving right off its beach. On Mexico's West Coast, Hotel Sierra Nuevo Vallarta with 362-rooms is nestled against the Sierra Madre Mountains on the longest and most spectacular beach on Banderas Bay with easy access to the colonial charm of Old Vallarta.

All-inclusive packages at the current Palace Resorts properties include luxurious accommodations, taxes and gratuities, all meals and snacks, alcoholic and non-alcoholic beverages, non-motorized water sports, and nightly entertainment. Wedding and golf packages are also available.

Palace Resorts, the company that set the standard of excellence in the five-star all-inclusive resort industry, now offers ten resorts in Mexico and one in St. Thomas, USVI. For information on any Palace Resorts vacation property, please call (800) 635-1836 in the United States and Canada, (34) 91-352-71-25 in Europe/Spain, and (52-998) 881-6088 in Mexico. For group sales call 800-539-3313. Visit Palace Resorts on the Internet at www.palaceresorts.com .

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