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Cuba Is Planning a Major Hotel Expansion

Cuba’s National Plan for Economic and Social Development, featured at the 7th Congress of the ruling Communist Party, plans to create at least 108,000 new tourist lodgings in the next 15 years or so.

According to official sources in Cuba, Tourism Minister Manuel Marrero announced that the project has already picked the possible locations for the future lodgings and will also focus on renovating existing room inventory.

Hotel Saratoga Havana Boutique Hotel
Hotel Saratoga Havana, Cuba

“Every hotel that is inaugurated is one more factory that earns, within our borders, revenues from abroad that the country needs,” President Raul Castro said.

“We can’t make the same mistakes that other countries do, when in the midst of new developments they forget about their old hotels,” Marrero said.

Last month, Starwood Hotels & Resorts Worldwide announced partnerships with several Cuban entities to manage hotels in the island nation.

Starwood’s deals, made possible through what appears to be unique approval from the Obama administration, marks the first US hotelier to operate in Cuba since the 1959 revolution.

The sites include: Hotel Inglaterra, owned by Gran Caribe, will become one of Starwood’s Luxury Collection hotels. The Quinta Avenida, run by Gaviota, will become a Four Points by Sheraton hotel. A third location is reported to be under letter agreement so far.

Starwood’s Jorge Giannattasio, chief of Latin American operations, said the deals included a “multimillion-dollar investment to bring the hotels up to our standards.”

It is unclear who will contribute the funds, but hotel management agreements do not typically include a partnership on the funding side.

Several days after Starwood’s announcement, Marriott announced it will be doing business in Cuba. Details were not provided.

What remains to be clarified is how US hotel operators gained approval to operate in Cuba while the US embargo, most of which was erected by the US Congress, restricts US firms from operating in Cuba – with a few exceptions. Furthermore, travel restrictions remain in place for US citizens, who cannot travel to Cuba for vacation purposes. Is there a carveout for US hotel customers who violate US travel restrictions?

Obama has used his executive authority to dismantle some of the Cuba-related business restrictions. Cubamacare is how the Cuba Journal refers to Obama’s special actions concerning Cuba.

Here is Cuba’s Q1 2016 Hotel Pipeline.

Cuba Is Planning a Major Hotel Expansion was last modified: May 20th, 2016 by Cuba Journal