It is no secrete that Cuba’s future economic development plans includes a focus on travel and tourism.
Current US rules have so far restricted US firms from doing business in Cuba. Although Obama has loosened some restrictions, the travel and tourism sector remain off limits for US-based firms.
Recently, Choice Hotels’ Steve Joyce visited Cuba. In an interview with ABC News, Joyce says,
“It’s fascinating, probably the most interesting thing I’ve done since going to China in the early ’90s. It is stopped in time in 1959, but the energy of this change, the rise of entrepreneurs and the government’s acceptance of foreign capital coming in is going to change the very nature. It’s all going to be difficult. They’re going to go from 50,000 rooms to 200,000 rooms in five to seven years. The airport is going to be crushed. The highways are going to be crushed. They are going to need to work on the infrastructure.”
Cuba’s current hotel development pipeline includes new entrants as well as incumbent players exploiting opportunity in the most dynamic segments of the hotel sector. For example, Germany-based Kempinski has partnered with Gaviota, a Cuban government entity, to refurbish a landmark building in Old Havana into a 246 key, 5-star luxury hotel (Hotel Manzana) slated to open in 2016. There appears to be a French construction company involved in the project – a sign this hotel is being constructed under a date-certain, fixed price contract that is standard in more mature marketplaces.
Of the estimated 18 foreign hotel brands active in Cuba today, Meliá Hotels is by far the most important single foreign player. The Spanish company started operations there in 1990 and today manages about 3,000 rooms via 27 management contracts with various entities of the Cuban government (excluding current projects under development).
