Hotel Saratoga Havana room

Cuba’s Q1 2016 Hotel Pipeline

Last week, the Obama administration announced two major hotel brands will seek to do business in Cuba.

White House officials expressed hope these deals would come together before Mr. Obama arrives in Havana March 20. Marriott CEO Arne Sorenson, vice chair of the President’s Export Council, will travel to Cuba with Mr. Obama.

“We are optimistic that we are going to get a green light soon from the U.S. government to have hotels under the Marriott flag in Cuba,” said Thomas Marder, a Marriott spokesman.

With Obama’s backing, it appears the much anticipated entry of US hotel companies will focus attention on Cuba hotel pipeline and inventory outlook. The excitement over new players in Cuba’s hotel and tourism sector shows that Cuba is what the travel industry would love to be if it could.

The Cuban hotel and tourism sector is completely controlled by the government. Foreign companies must partner with domestic state-owned entities to do business in the island nation.

Trends in Cuba point in two directions. First, Cuba’s plans include expanding and upgrading assets in the all-inclusive space. Varadero is the primary region for Cuba’s terrestrial cruise ship, all-inclusive offerings. Second, Cuba’s luxury and boutique hotel segment is getting a lot of attention, especially in Havana. Occupancy rates in the luxury segment are reportedly at 98% during the busy winter season.

Here is Cuba’s Q116 hotel pipeline of hotels under construction (and some recent openings) that we were able to verify:

Dhawa Cayo Las Brujas – This luxury hotel is expected to open July 2016. It will be the first property in the region for Banyan Tree Hotels & Resorts. Famed for vast acres of pristine coral reef, rich underwater fauna and botanical wildlife, the Las Brujas area is a popular attraction for marine enthusiasts. 516 rooms.

Hotel Manzana – 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 de Gomez) 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. The structure, built in 1910, was the location of Havana’s first indoor shopping mall.

Sign posted outside the construction site of the new Kempinski's Hotel Manzana in Havana. (Simons Chase/Cuba Journal)
Sign posted outside the construction site of Kempinski’s Hotel Manzana in Havana. Image by Cuba Journal.

Carbonera Resort – a 1.5 million square foot joint-venture project. The resort is located 65 miles north of Cuba’s capital Havana, near the Varadero beach resort. The Cuban state-run company Palmares SA will hold 51% ownership in the venture. London & Regional, a UK-based property company owned by brothers Richard and Ian Livingstone, plans to invest more than $500 million to develop the luxury Cuban resort, which could be the single largest investment in the island. It has been reported that geology and engineering are underway.

Hemingway Hotel – Suntine International-Economic Trading Company of China and Cuba’s Cubanacan hotel group are partners in a project to build a new Hemingway Hotel at the Hemingway Marina just west of Havana. The state-run Chinese investor will have a 49% ownership and will provide $150 million for the project. Cubanacan, with 51% ownership, is providing the land and other resources. According to an announcements last year, the final project will include a 600-room luxury hotel. Citic Construction, the main contractor for the Beijing Olympic Games, and the Cuban Construction Ministry will build the proposed hotel.

Cuba-China Joint Venture – Beijing Enterprises Holdings Limited plans to create a large real estate, which will include a five-star hotel and a golf course east of Havana. The complex will be constructed in Bellomonte, on Cuba’s northern coast, at an estimated cost of $462 million. It will consist of hotels, a golf course and condominiums. Last year, José Raúl Daniel Alonso, business director at the Ministry of Tourism (MinTur) said that the pact, between the state-run organization Grupo Palmares and the Chinese firm Beijing Enterprises Holdings Ltd., would be the second of its kind after Carbonera.

Meliá Veradero International Hotel – The Hotel Internacional in the Cuban resort town of Varadero first opened on December 24, 1950 and was designed by architects Ricardo Galbis and Vicente Llanera. There was controversy from the architecture community over the demolition of building due to its architectural significance. The old building was one of only three existing hotels in the popular beach when the revolution triumphed in 1959. The new complex, slated to open in 2018, will have 934 rooms and will be managed by Meliá.

Ocean Casa Del Mar - Cuba
West Pool – Ocean Casa Del Mar

Sofitel So La Habana – Accor and state-owned Gaviota are jointly developing in the luxury and upscale segment with a 218-rooms and hotel located on the corner of the Malecón and Paseo del Prado, Havana. Accor, the hotel manager, expects the construction of the 218-room building to be completed by the end of 2018.

Ocean Vista Azul (newly opened) – Located in Veradero, this new construction has resort will have 470 rooms. The hotel is operated by Spanish hotel company Ocean H10 Hotels and owned by state-owned Gaviota Group.

The Pullman Cayo Coco (newly opened) – Accor announces the signature of a management contract with Gran Caribe (Ministry of Tourism) for the Pullman Cayo Coco hotel in Cuba last year. This 518-room hotel-resort (including 40 suites), offers upscale services and will notably be the first establishment on the island offering Wi-Fi in all its rooms. The Pullman Cayo Coco is located 10 minutes from the international airport and features a sea front (over 500 meters) on the “Las Coloradas” beach.

The Warwick Cayo Santa Maria (newly opened) – Located in Cayo Santa María, the largest of the Villa Clara Keys located in the north of Cuba. The 800-room property includes 16 suites, eight restaurants and 1km of beach. Construction began in 2016. The hotel is operated by the France-based Warwick International Hotel and and owned by state-owned Gaviota Group. Also, Warwick took over management of the Varadero Naviti Resort Hotel (formerly Allegro Varadero), an all inclusive 4 star hotel in Varadero.

Ocean Casa del Mar (newly opened) – Located in Cayo Santa María, the largest of the Villa Clara Keys located in the north of Cuba. The all-inclusive, 800-room resort has direct access to a 1km beach. The hotel is operated by Spanish hotel company Ocean by H10 Hotels and owned by state-owned Gaviota Group.

Hotel Packard – This famous Havana hotel has been the subject of media attention for many years. Spanish starchitect Rafael Moneo is reportedly working on it for Iberostar. Today, scaffolding holds up the building’s original façade.

For more information about hotel investment in Cuba, read about how to frame the argument about hotel investment in Cuba.

Cuba’s Q1 2016 Hotel Pipeline was last modified: March 25th, 2016 by Simons Chase