Cuban government looks to lure U.S. hoteliers with new projects
Hotel investment conference in Havana welcomes U.S. sponsors
HAVANA – For decades, any private enterprise daring to do business in Cuba faced U.S. sanctions or losses through seized property. Now to lure U.S. companies, the Cuban government offers business partnerships. And they are even promising to honor property ownership rights in perpetuity to foreign investors with the proper permits.
As the two countries' Cold War policies become a part of the past, Starwood was the first U.S. hospitality company to risk operating the Four Points Sheraton in Havana's Miramar district. Now Marriott and rivals Hilton, Hyatt, Wyndham and Archipelago may also want in.
The U.S. hospitality sector had a strong presence at the Latin American Hotel and Tourism Investment Conferences held on Monday and Tuesday in Havana. They are among those willing to bet that President Donald Trump will not be preventing U.S. investment in Cuba.
Like Starwood, the companies would require a special U.S. Treasury Department license. Arturo García, the founder of the event hosting some 250 companies, said he knew several U.S.-based companies were waiting for U.S. licensing to launch projects all over the island.
The 10th annual conference also hosted the World Travel and Tourism Council and executives from Latin America, Europe and Asia at the Meliá Cohiba Hotel. Michael Maisel, of Engage Cuba, a Washington-based lobbying group in favor of lifting the half-century U.S. embargo, also attended the conference.
"For so long, we have been disconnected and finally these relationships are coming to bear fruit after 60 years of isolation," Maisel said.
During the Monday inauguration ceremony of the conference, the focus was on catering to tourists who demand luxury. Alexis Trujillo, the Cuban vice minister of tourism, touted a portfolio of new opportunities including 30 golf courses, seaside resorts and high-tech theme parks.
Cuban officials presented 21 new mixed-use projects and said the associated infrastructure was improving. There were projects in Ramon de Antilla Peninsula in the Holguin province, Cayo Cruz island in Camaguey, and Cayo Paredon island in Ciego de Avila.
"Slowly but surely we are learning about the conditions here and our company is working together with the U.S. authorities in this process," Louis Alicea, of Wyndham, told Reuters.
Choice Hotels representatives were concerned about the competitive advantage that other countries had over U.S.-based companies. A spokesperson of the company based out of Rockville, Maryland, said they were "exploring opportunities in the market and following the regulatory framework in the U.S."
During Republican campaign events in Miami, the pro-business candidate criticized President Barack Obama's renewal of relations with Cuba. He criticized him for supporting policies that strengthened the authoritarian regime and perpetuated their reported ongoing human rights violations.
While U.S. cruise ships and airlines have been doing business with the Communist island due to Obama's relaxed restrictions, the Cuban government reported the number of U.S. tourists increased at a rate of about 18 percent this year.
Some of the Cuban-American travelers have limited their transactions to the new class of "cuentapropistas." The licensed entrepreneurs operate small private businesses including the "casas particulares," the island's expanding private bed-and-breakfast sector mostly reliant on a dysfunctional relationship with Airbnb, an online marketplace for vacation rentals.
Fidel Castro, who bedeviled 11 U.S. presidents before dying last year, welcomed some foreign investment and allowed small private businesses after the collapse of the Soviet Union in 1991. His brother Raul Castro stepped up the efforts when he succeeded him in 2006.
Castro allowed the Cuba's Revolutionary Armed Forces' GAESA, a conglomerate of at least 57 companies, to turn into the gatekeeper. They were more eager for partnerships after Venezuela's Hugo Chávez died in 2013 and his successor, President Nicolas Maduro, faced the ongoing economic crisis.
Sarkis Yacoubian, a Canadian who did business in Cuba, works as a consultant. He is among the experts warning those who are looking into dealing with GAESA to proceed with caution. Cuban authorities deported him three years ago, after he was accused of causing economic harm to Cuba. They held him for nearly three years on a 9-year sentence and seized assets valued at $20 million. He claims he is innocent.
GAESA's Grupo de Turismo Gaviota, promotes a parallel economy with international partners managing more than 80 percent of their portfolio. There are perks for those dealing with them. Warwick International Hotels, Iberostar Hotels and Resorts, Blue Diamond and Valentín Hotels and Resorts are some of their partners.
Most recently, they allowed the Geneva-based Kempinski Hotels to operate a 246-room five-star hotel and luxury spa. The hotel was set to open later this year and will share a historic building in Old Havana above the Manzana de Gómez, Cuba's first luxury mall since the 1959 revolution.
Local 10 News Andrea Torres contributed to this story from Miami.
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