Hoteliers See Land of Opportunity in Cuba

Hotel Business goes to Cuba! And before you start conjuring images of cigars, rum and salsa dancing, I’m here to assure you Executive News Editor Stefani C. O’Connor was on the scene to report on the lodging landscape of the tiny island just a few hundred miles off the coast of Florida. OK, and maybe she had some fun, too, on what many people I know are calling a bucket-list trip.

So, it was the May 21, 2015 edition of Hotel Business—that year’s NYU issue—which “flew the flag” of Cuba on its cover. At the time, our cover line questioned: Land of Opportunity? And the feature story reported how hotel companies were flagging the Caribbean country as a hot spot for future growth, eager to tap into the island’s potential. And while the 2015 article delivered a lot of speculation—written a few month’s after former President Barack Obama’s December 2014 shift in policy to normalize relations with Cuba—this issue’s article, now two years later, reveals some of the answers, or at least sheds light on them. But keep in mind: It’s all a work in progress, from bureaucracy to infrastructure. Some strides have been made in paving the way to enter Cuba from both a travel and investment perspective—bolstered in part by Obama’s 2016 visit—but there’s still a way to go.

In an article in The New York Times last month, the author wrote that as Cuba’s relationship with the U.S. grows warmer, real estate development is heating up, too, as hotel developers are finding ways to move projects forward. The piece goes on to state, “President Raúl Castro’s loosening restrictions on private enterprise, improving relations wit the United States and financial necessity…have fueled rapid change in many areas.” And our own O’Connor states in her piece about the SAHIC Cuba conference (which began on page 1), that change, in fact, is in motion especially as it relates to travel and tourism.

In the 2015 piece, Hotel Business queried: What does this mean for U.S. travelers who have long dreamed of visiting the nearby island country? How about U.S. hotel investors, developers and hotel brands? With this once-taboo tropical island suddenly an option for Americans—though U.S. regulations on visiting Cuba have not been completely relaxed and so the still-anticipated flood of American visitors has not yet been felt—the hospitality industry, in particular, has been revved-up. Fast forward: More than four million tourists visited in 2016, and roughly 614,000 of them were Americans. And while the Cuban government owns all hotels in the country, big-brand names—think Marriott—are set to manage many of them. Yes, there are still obstacles to this surge in demand for lodging that will accommodate a growing tourism market—not the least of them being unreliable utilities, widespread poverty, damaged infrastructure, the need to import food, power outages—but that opportunity we mentioned a couple of years ago is on the other side, as Hotel Business reports from the Cuba conference.

Last year, prior to the completed Marriott acquisition, Starwood Hotels & Resorts became the first American hotel company to enter Cuba in nearly 60 years with is Four Points by Sheraton Havana. And while it remains to be seen how tightly the Cuban government will control private enterprise, it also remains to be seen what opportunities will evolve for the U.S. lodging sector (non U.S. hotel companies have had a presence in Cuba for quite some time) as last year, the Cuban government declared a goal of about 104,000 keys and 10 million visitors by 2030.

Land of opportunity? Yes.