Of the approximately 250 guests at the program, about three-quarters are residents of Eretz Yisrael. My in-laws, Mordechai Ben-David, and a handful of others represent the American contingent. So what happens with Yom Tov Sheni?
Now, the Israelis all came with every intention of entirely ignoring Yom Tov Sheni. The less learned of them find the entire notion of Yom Tov Sheni extremely foreign (ba-da-bum! Thank you, I'll be here until Wednesday.) The more learned of them - including numerous rabbanim and talmidei chachamim - all planned to follow the teshuvah by Rav Shlomo Zalman Auerbach, cited in the sefer Yom Tov Sheni K'Hilchaso, explicitly discussing this scenario. Ordinarily, an Israeli spending Yom Tov abroad may not perform melachah on Yom Tov Sheni - at least in public. But places such as Daios Cove, where I am, are different. While there is a long history of Jews in Crete, the only Jewish community still extant (and they don't even get a minyan) is over a hundred miles away, at the other end of the island. In such a situation, rules Rav Shlomo Zalman, there is no reason for residents of Eretz Yisrael to refrain from melachah - even in the presence of people from Chutz l'Aretz. He states that this does not cause discord, since everyone understands that there is a mix of Israelis and chutznikim present.
But you can always count on Jews to cause discord!
The Rav supervising the kashrus at the resort follows Rav Wosner's psak for such a situation. He rules that if there is even a single Jew from Chutz l'Aretz present, the Israelis may not perform any melachah in public. Furthermore, the entire atmosphere must be one of Yom Tov Sheni. As a result, on the first day of Chol HaMoed, the Israeli minyan (with the majority of guests!) had to take place at the same time as the Diaspora minyan, and there was no food served until kiddush at 11am followed by lunch at 1.30pm - much to the annoyance of people such as myself, with small children who can't wait until that time to eat. Meanwhile, there were Israelis walking around the lobby dressed in a non-Chag manner, and renting cars!
But it was on Isru Chag that things really got weird.
The mashgiach kashrus insisted that the Israelis not wear tefillin in their own Shacharis minyan! He said that instead they have to put tefillin on surreptitiously in their rooms later during the day. The other rabbanim on the program, who were, shall we say, not exactly happy with this, instead organized a "secret" Shacharis minyan, for the majority of the guests, at a concealed location in the far end of the resort. Meanwhile, there are several guests checking out today, plenty of non-Yom-Tov activity in the lobby, and lots of Israelis riding the funicular (for those that are particular about the vernacular, a funicular is an elevator/cable car that rides up a slope).
It's a bizarre situation, and it's not clear what should be done. On the one hand, the mashgiach is presumably to be considered as the mara d'asra, and thus his psak should determine the situation. On the other hand, when the other rabbanim on the program (who are the ones with a public role, giving shiurim) follow Rav Shlomo Zalman, and the majority of guests have absolutely no intention of publicly refraining from melachah on Yom Tov Sheni, it's a little unrealistic to expect this to happen - and thus there effectively is no atmosphere of Yom Tov Sheni.
Well, as one of the guests has famously declared, someday we will all be together...