If using 西施, (as a general / traditional indication of physical beauty), is not comfortable to you, then you can say, 情人眼里出美人 or 美在情人眼.
BTW, 旁觀者 means "bystander", i.e., someone who is an "objective observer", whereas "Beauty is in the eye of the beholder" denotes a "subjective assessment / opinion" by an involved beholder.
So, 美在旁觀者的眼睛, (which is unnecessarily verbose and awkward) could be "idiomized" to 美在情人眼.
However, if you are looking for a "generic" phrase that applies to both persons and objects of interest, then perhaps 美在各眼中？which takes away the narrower application to 情人 only.