US hotel company Starwood to run 3 Cuban hotels
BY MICHAEL WEISSENSTEIN
Starwood signed a deal on Saturday to renovate and run three Cuban
hotels, returning U.S. chains to the island more than 50 years after
American hotels were taken over by Fidel Castro’s socialist revolution.
All Cuban hotels are state-owned so the deal puts a major U.S.
corporation directly in business with the Communist government under a
special U.S. license that pushes Washington’s legal dismantling of the
Cuban trade embargo further than ever before. In a once-unimaginable
arrangement, a hotel owned by the tourism arm of the Cuban military will
become a Sheraton Four Points.
The deal comes on the eve of President Barack Obama’s historic visit to
Cuba, which will open a new era between the former Cold War foes that
has American travelers and businesses eagerly eyeing opportunities on
the island nation 90 miles (145 kilometers) south of Florida.
Starwood’s chief of Latin America operations, Jorge Giannattasio, said
the company will invest millions to renovate and rebrand the Quinta
Avenida, Santa Isabel and Inglaterra hotels, train and hire new staff
and reopen the hotels by the end of the year. The Quinta Avenida is
owned by Gaviota, a military-run tourism conglomerate. The Santa Isabel
and Inglaterra, which are run by other state agencies, will be operated
as part of Starwood’s Luxury Collection brand.
It’s unclear, however, how long Starwood can be called an American
company. On Friday, Starwood called off a $12.2 billion buyout agreement
with Marriott in favor of an offer from a group of investors led by the
Chinese insurance company Anbang.
Cuban hotels are notorious for their ramshackle furnishings and poor
service. Giannattasio said the Cuban Starwood hotels would be refitted
with everything from new mattress to improved kitchen equipment and
safety measures and managed by teams of expatriate Starwood employees.
Cuban law prevents widespread direct hiring of Cuban workers by foreign
firms. International companies complain that their inability to directly
hire Cuban employees, and if necessary demote or fire underperforming
staff, hinders their ability to provide satisfactory customer service.
Giannattasio said he was confident that Starwood would have enough
flexibility and control to maintain the company’s standards in Cuba,
although he declined to comment on details of the firm’s arrangement
with the Cuban government. Starwood will receive a fee for its branding
and management services.
The number of visitors to Cuba surged nearly 20 percent last year, with
nearly 80 percent more Americans flying to the island. The surge has
overwhelmed Cuba’s decrepit tourism infrastructure and left hotels above
Numbers are expected to rise even more sharply this year with the start
of as many as 110 commercial flights a day from the United States, one
of dozens of moves the U.S. administration has made to punch holes in
the trade embargo as part of a broader normalization of relations with
Cuba since Obama and Raul Castro declared detente on Dec. 17, 2014.
On Tuesday, the Obama administration removed the last meaningful
restrictions on travel to Cuba, announcing that it would allow
individuals to visit the island for “people to people” educational
trips. While the ban on U.S. tourism technically remains in place, it
becomes an honor system that is essentially unenforceable.
Americans will have to keep records for five years about what they did
in Cuba, but won’t have to submit them unless asked. The Obama
administration previously loosened requirements by allowing organized
trips without advance U.S. permission and independent travel for
specific purposes like religious activities or sports events.
Source: US hotel company Starwood to run 3 Cuban hotels | Miami Herald –