One of French Polynesia's main hotels, the Sofitel Maeva Beach in Tahiti, will close at the end of November.
The hotel chain's regional director, Thierry de Jaham, has told a news conference that the closure has been prompted by losses amounting to more than 13 million US dollars since 2006.
Arrival numbers have fallen sharply since 2000 while taxes and wages as well as energy costs have gone up.
The 40-year old hotel has 105 employees, whose future is yet to be determined as some may find work at other of the chain's hotels.
There has been a suggestion that a dozen employees may retire.
Mr de Jaham has called on the authorities to adopt measures to revive tourism, saying sharply lower airfares from Paris would fill the hotels.
He has also warned that if nothing is done, more hotels will close.
When news of the impending closure of the Sofitel Maeva Beach broke last week, a leading union described it as a catastrophe.