Marc Resorts Hawaii abruptly ceased hotel management operations on two islands this week, according to company executive vice president Paul Tomonari.

Travel agents across the state started noticing a problem Tuesday when the Web site for the local hotel and resort management company was "deactivated."

Marc Resorts marketing manager Cathy Gleason sent out an e-mail yesterday that said the company "will not be able to accept any arrivals going forward. We are sincerely sorry for the inconvenience that it places on you, however, we simply cannot continue in this manner."

Tomonari confirmed yesterday afternoon that the company's nearly 40 employees were notified on Monday that the company was shutting down.

"The economic climate has created difficult challenges for a small company like ours and we're reluctantly closing our doors," Tomonari said.

He said the company is working with other management companies to take over to try to make the transition as seamless as possible.

It was not clear how many guests would be affected. In recent months, the company had cut its list of properties significantly. The company was managing the Moloka'i Shores on Moloka'i; on Kaua'i, the company managed the Pono Kai in Kapa'a, and three Princeville properties — Pali Ke Kua, Pu'u Poa and Hale Moi Cottages.

Tomonari said the company handled the sales, marketing and reservation services for the Hotel Molokai, which is self-managed and unaffected by Marc Resorts' closure.

Hotel Molokai general manager Michael Drew confirmed that his company and guests are not affected by the change.

"Marc Resorts has never managed or owned our property but was simply an additional reservation source for us," he said."It's business as usual at Hotel Molokai."

In 2007, the company had managed units at the Hawaiian Monarch hotel, and Marc Diamond Head Beach Hotel & Residences on O'ahu; and Aloha Maui Vista Resort on Maui.

"Marc Resorts has had a long history in the Hawai'i hospitality industry, and we're sad it's come to this point where we need to protect our constituents from further losses," Tomonari said.

He thanked travel partners, owners of individual units and the guests who stayed with them over the years, adding, "we will miss them all."

People who may have made reservations for a Marc Resort Hawaii stay for the coming days should have been reached about the change, he said.

"We have contacted all our future guests directly," Tominari said, and also travel partners like Expedia, Orbitz, Pleasant Holidays and All About Hawaii to advise and relocate the guests with reservations. All future arrivals with deposits have already or will be refunded.

Tomonari said it's premature to say which companies would take over.

But Castle Resorts & Hotels confirmed that the company is taking over the Moloka'i Shores.

"We will be managing Moloka'i Shores as of Friday, and there will be no disruption in services," said Alan Mattson, Castle president and chief operating officer.

And Mattson said the company is working on other properties.

"We are helping with bookings and we are making our accommodations available," Mattson said. "We want to make sure people have a place to stay."