Starwood Hotels & Resorts Worldwide has partnered 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.
Gaviota S.A., led by General Luis Perez Rospide for the Cuban military, is emerging as the most important entity driving growth in Cuba’s tourism sector.
Cuba’s communist, single-party government retains almost complete control over the economy. Foreign investors must joint venture with a state-owned entities in order to do business in country. Gaviota has been the partner for most of the country biggest foreign joint venture projects involving Meliá Hotels International, Kempinski, Iberostar, Riu, Blau, H10, Blue Diamond, Hotusa and Pestana.
Gaviota operates numerous businesses in various verticals of the tourism sector including hotels, resorts, marinas, tours, car rentals and travel agencies.
At its 27th anniversary celebration last year, Gaviota announced more 55 hotels in operation, more than 24,000 rooms, sales greater than $650 million and 24,376 workers.
According to state television reports, Gaviota has plans to nearly double its number of hotel rooms to 50,000 by 2020.
Here is Cuba’s Q1 2016 Hotel Pipeline