The hotel hasn't been demolished - it's still there. At least, most of it's still there - just one end of it has been carved away by bulldozers. When I was there a couple of weeks ago they were erecting a fence alongside the part that had been carved away, so it looked as though the rest of it was going to stay.
I think it was called the Minoan Princess and I am sure it was never opened as it was never completed. It was in the same derelict state way back in 1990, although the palm trees weren't as big.
Greecemad