Photo by:  Gary Raynaldo /  The Spain-owned Meliá Cohiba hotel across from  Malecón sea in Havana, Cuba

By Gary Raynaldo    DIPLOMATIC  TIMES

Although President Trump opened the door this week for lawsuits over Cuban confiscated properties, the action will not target foreign firms doing business in the socialist island, at least not for now. U.S. Secretary of State Mike Pompeo told Congress Monday that lawsuits would be allowed in American courts against Cuban companies using property seized during the 1959 revolution.  However, the Trump administration keep in place a ban against suing foreign firms doing business on the communist-ruled island.  In Cuba, foreign investment has been thriving thanks to a boom in tourism to the island. Many foreign firms have cut deals with the  Cuban government to build hotels over the past years.

Spanish hostelry giant Meliá International is expanding its hotels in Cuba. Meliá has added 5 new hotels with a total of 409 rooms to its portfolio in the Caribbean island in the first quarter of 2018.  According to Meliá, the Spain-based hotel company will operate 2,145 new rooms in Cuba by the end of 2018.

The 5 new hotels are located in the heritage cities of Cienfuegos (Hotel La Union, Hotel Jagua and Hotel Meliá San Carlos) and Camagüey (Hotel Colon and Gran Hotel). The hotels represent a new style of construction for Meliá in Cuba, in that all of them are small to medium-size “with history” in exceptional historical buildings in destinations considered world heritage sites. Typically, Meliá has concentrated on modern, large hotels in establishing new properties. Meliá is also planning to add three more hotels in the city of Trinidad prior to 2020. By the end of 2018, Meliá also opened two new flagship hotels in both Varadero and Cayo Santa Maria.

“Within the framework of our strong commitment to helping improve Cuban tourism, we have the opportunity to promote unique cities with exceptional tourism potential such as Cienfuegos, Camagüey, Santiago de Cuba, or Havana, guaranteeing the internationally acknowledged Meliá service and quality standards from the east to the west of the island.” 

Gabriel Escarrer, Vice President and CEO of Meliá Hotels International.

Cuban Hotels Industry is Thriving with Foreign Partners Enlisted in Projects

Photo by  Gary Raynaldo /  Towering, gleaming luxury 401-room Meliá Cohiba Hotel located in the Vedado district of Havana, Cuba, just off the Malecón. The hotel opened in 1994. The hotel is a joint venture between Meliá International and the Cuban State.

The boom in Cuba’s tourism industry in recent years, has led to a strong upswing with joint hotel venture projects. The Meliá company was the first foreign partner for Cuba. About 35 percent of the hotels meant for foreign visitors to Cuba are under foreign management. Many foreign hotel partners are manager and shareholder at the same time, in some cases the stakes being just 20 or 30 percent.  Currently, Meliá International provides 33 hotels in Cuba in Cayo Coco, Cayo Guillermo, Cayo Largo, Cayo Santa María, Holguín, Havana, Santiago de Cuba, Varadero,   Camagüey and Cienfuegos. Meliá Hotels International is Spain’s leading hotel company and one of the largest hotel companies in the world, with seven global brands and more than 370 hotels in 43 countries on 4 continents.

Meliá Hotels International earns 22.1 Million Euros in the First Quarter 2018

Meliá Hotels International earned 22. 1 Million Euros in first quarter 2018, an increase of 19 percent when compared to the same period in 2017. The gain in earnings came despite the depreciation of the dollar, which decreased by 15 percent in comparison with Q1 2017. A large part of the company’s revenue is generated in US Dollars despite accounts being stated in Euros. The Company highlights positive momentum in the Caribbean, where it will open more than 3,000 new rooms in Cuba, Mexico, Dominican Republic and Colombia in 2018.

Meanwhile, U.S.-Cuba hotel deals in jeopardy after Trump policy change

Photo by: Gary Raynaldo /  Cuba’s iconic Hotel Inglaterra in Old Havana is part of a management deal with U.S.-based Starwood Hotels and Resorts.

With great fanfare in March 2016, Starwood Hotels & Resorts signed deals in Cuba granting it management of three hotels in Havana, including the iconic Inglaterra. The deal was the first entry by a U.S. hospitality company into Cuba in nearly six decades. In addition to the Hotel Inglaterra, which became part of Starwood’s Luxury Collection, the Hotel Quinta Avenida, became a Four Points by Sheraton hotel. Both underwent renovations and have opened under their new brands. The Starwood deal had been been prohibited under the U.S. economic embargo of the Communist-ruled island. In 2014, President Obama loosened restrictions on trade and investment following a rapprochement with the Cuban government. Many American companies lined up to do business with Cuba. In June 2017, Trump announced a roll back of sorts of Obama’s Cuba policy.  “Effective immediately, I am canceling the last administration’s completely one-sided deal with Cuba,” President Trump said June 16, 2017, as reported in the NY Times.   As part of the new policy, Americans will no longer be able to plan their own private trips to Cuba, and those who go as part of authorized educational tours will be subject to strict new rules and audits to ensure that they are not going just as tourists. American companies and citizens will also be barred from doing business with any firm controlled by the Cuban military or its intelligence or security services,walling off crucial parts of the economy, including much of the tourist sector, from American access, the NY Times reported.

Photo by Gary Raynaldo /  Lounge inside Hotel Inglaterra in Old Havana,  Cuba.

“This turnaround would put an end to deals like the Starwood Hotels and Resorts takeover of three military-run hotels in Havana, experts said – though existing deals will not be affected,” reports The Real Deal.

Under Trump’s Cuba policy,  American visits to the island have slowed and U.S. business interest has subsided due to the uncertain post-Obama climate.