The managers of ‘Iolani Palace are objecting to the state’s decision to shut down the nation’s only royal palace this week, saying the action resulted in the loss of revenue and forced them to turn away international delegations that had been scheduled to visit.

"‘Iolani Palace anticipates the lost revenues to exceed $42,000 due to the forced closure by the governor’s office," the Friends of ‘Iolani Palace said in a statement.

State Land Board Chairman William Aila announced Monday that the palace and palace grounds would be closed for security reasons, citing this week’s Asia-Pacific Economic Cooperation conference.

That night, state sheriffs arrested 22 members of the Hawaiian Kingdom Government who had chosen to remain on the palace grounds as a sign of protest.

All regularly scheduled tours were shut down, as well as several APEC-related visits, said the Friends of ‘Iolani Palace, which has a contract with the state to operate the complex. The Department of Land and Natural Resources, which Aila heads, is responsible for the palace grounds.

Palace officials "had to issue apologies to the delegations of China, Indonesia, Mexico, Peru, Taiwan and the U.S. Department of Commerce, all of whom had planned special visits to the historical site for high-ranking officials," the Friends said.

A source close to the situation said the scheduled visitors had included separate visits by Indonesian President Susilo Bambang Yudhoyono, Chilean President Sebastián Piñera, U.S. Commerce Secretary John Bryson and the first ladies of China, Mexico and Taiwan.

"APEC is one of the biggest international events in the history of Hawaii and a rare opportunity for us to share with the world our islands’ heritage, hospitality and Native Hawaiian culture," said Kippen de Alba Chu, executive director for ‘Iolani Palace. "It is inconceivable that we have to turn away national and international visitors from ‘Iolani Palace, an iconic symbol of Hawaiian royalty."

"This unilateral decision to close the palace for tours was made without consulting the Friends of ‘Iolani Palace," de Alba Chu said. "I received a call on Monday evening from the Lieutenant Governor’s Office relaying a message from the Governor’s Office that the palace would be closed to all tours, including APEC-related tours."

Aila said he was disappointed that Friends issued its statement to the media without expressing its objections to his department.

Aila said he ordered the shutdown after consulting with Gov. Neil Abercrombie, the police department, the state Sheriff Division, the Office of the Attorney General and his own staff.

"We agreed that was the proper thing to do," he said of the closing, which runs until 6 a.m. Tuesday.

Aila said he was aware there was a possibility that APEC dignitaries wanted to visit the palace and his office even received queries from the security details of several nations over issues about access to the palace, he said.

Nonetheless, he said, "I stand by my decision to close the palace for the protection of this valuable cultural resource."

Members of the Hawaiian Kingdom Government, the bulk of whom were released Tuesday after appearing in state District Court in Kaneohe, had stated they would return to the palace. They had not returned as of Wednesday evening.

Members of the group chained themselves briefly to the gate of the palace on Nov. 2 before negotiating a compromise with Aila that allowed them to use restrooms on the grounds.

The group has been gathering at various parts of the palace grounds five days a week since May 2008, showing up in the morning and leaving in the afternoon.

Aila said he had also heard group members remarking that they would try to return. "We’re prepared should they come back," he said.

De Alba Chu said King Kalakaua built the palace in 1882 to enhance Hawaii’s prestige overseas.

"The King’s dual mission of bringing Hawaii to the world and the world to Hawaii can easily be seen throughout ‘Iolani Palace in its architecture, furniture, construction and artifacts," de Alba Chu said. "Kalakaua forged bilateral relations with these very same APEC members, which explains why these countries’ delegations were so excited to visit the palace," said de Alba Chu. "Hawaii and the various APEC members share a common history that long predates annexation by the United States. This decision to completely lock down the palace is not aloha. It is the exact opposite."