The hotel has a wikipedia entry, and here's something to pique the imagination: "The structure, and what it once was, is considered a historic landmark and a national icon in the city of Ponce and Puerto Rico at large." Why did it close?
The hotel closed down in 1975 for reasons that continue to be unknown. Speculation was that there were labor conflicts as well as that the management of the hotel was disappointed with the Government of Puerto Rico's failure to build a better access road to the hotel.
The hotel's only access road was through a narrow one-way, one-lane alley in a financially deprieved neighborhood north of the city.
Some photos of its current state here; walkthrough video of its grounds here.