- Cuba’s Travel Industry: An Array of Opportunities
THE LAUNCH DURING HAVANA INTERNATIONAL FAIR OF A NEW ISSUE OF THE BUSINESS OPPORTUNITIES PORTFOLIO IS ONE OF THE MUCH-ANTICIPATED MOMENTS BY PEOPLE INTERESTED IN INVESTING, ESPECIALLY IN THE TRAVEL INDUSTRY, ONE OF THE MOST DEVELOPED SECTORS IN CUBA
A look at the business that have come through and those still in the process on the heels of the Investment Opportunities Portfolio put out by Cuba a couple of years ago, shows that despite some still-discrete progress, the number of done deals is considerable, at least in the travel industry.
With the passing of a new Foreign Investment Law by the Cuban government back in 2014, a series of opportunities opened up for foreign companies to build and market hotels developments in joint ventures with Cuban partners, sign management contracts or build new recreational ports and golf courses.
An avalanche of companies interested in doing business was soon on the table, in line with the Opportunities Portfolio offered by the Tourism Ministry to investors –since the effective increase and especially in terms of the number of tourists- has brought about overblown demand for hotel rooms and services, which is already significant in some months and destinations, thus causing shortfalls in accommodation amid a growing amount of private lodging options.
The goodwill between Cuba and the United States, flexible travel regulations, a rapprochement process which most people describe as irreversible, and the resumption of scheduled flights between both countries have had an impact on the increasingly larger inflow of tourists.
In 2015, for instance, the largest Caribbean island welcomed 3,524,779 tourists, 17 percent up from the previous year. And growth in the first half of this year shot up to a staggering 11.7 percent compared to the same period last year.
The curious thing is that even though the country hasn’t still received a spectacular wave of U.S. visitors because their laws make it difficult for them to travel to the island, the National Statistics and Information Office (ONEI is the Spanish acronym) revealed last June that other outbound markets have also increased their turnouts as stacked up against the previous period. It’s some sort of push effect, with many people wanting to visit the island before prices go dramatically up and their trip becomes unfeasible.
When compared to 2015, the first months of 2016 reported an increase in the number of tourists coming from Germany (69.2 percent), England (24.1 percent), Spain (29.8 percent), Mexico (34.4 percent), France (19.1 percent), Italy (12.1 percent) and Argentina (8.2 percent).
The big question is where they are going to stay over. The accommodation offer is undoubtedly the most visible –although not the only- problem when it comes to coping with this avalanche of tourists.
Sources from Cuba’s Tourism Ministry point out that the country presently manages 63,000 rooms, nearly 70 percent of which are part of four- and five-star hotels. They are complemented by over 14,000 private rooms, a sector clearly on the rise and with a number of guestrooms in small hostels that grows on a daily basis.
The state-run sector is expected to count on 3,000 new hotel rooms by the end of this year, but the goal is to have at least 85,000 hotel rooms by 2020, let alone more private lodgings in houses and hostels.
The problem in the short term is more complex in certain destinations with low hotel infrastructure, such as Trinidad, Viñales, Cienfuegos, Santiago de Cuba or Camagüey, where the offer of state-run properties has been supplemented by private accommodations, although it’s not a generalized phenomenon.
That’s why several projects are being developed at double speed. Other developments depend on possible investors who should not only shell out money for the new builds, but also on their necessary entertainment and service infrastructure, not to mention logistics that supports them and that’s still quite meager.
Put in plain English, Cuba presently stands out as a paradise for investors, who also find short and long term warranties in the country, as well as a highly beneficial environment of stability, safety and security.
New builds and openings
Habaguanex, the company that runs the hotel and extra-hotel activity in Old Havana, announced that it’s going to open the following hotels in the 2017-2019 period: Cueto (57 rooms at the Old Square), Marqués de Cárdenas de Monte Hermoso (21 rooms at St. Francis of Assisi Square), Catedral (24 rooms, a block east from the cathedral) and Real Aduana (St. Francis of Assisi Square).
On the other hand, Starwood became the first U.S. hotel company to sign a management contract with Cuba’s Gaviota to operate Four Points by Sheraton Havana. And it’s also planning to rebrand the former Inglaterra Hotel under its Luxury Collection flag. The same will happen with Santa Isabel Hotel, nestled in the Arms Square, also in Old Havana.
Likewise, Swiss group Kempinski is giving the final touches to the centric Manzana de Gomez Hotel, right in the heart of the Cuban capital.
French Accor has also partnered with Gaviota to build Sofitel So Havana, which is being constructed on the corner of Prado and Malecón.
Just a few yards away, Grupo Gaviota is giving the old Packard Hotel a new lease on life with an all-new design that includes more guestrooms.
Beyond the capital, Singapore’s Banyan Tree Resorts has gone into a partnership with Gaviota to open Dhawa Cayo Santa María, Angsana Cayo Santa María, Banyan Tree Cayo Buba and Angsana Cayo Buba, near Varadero.
Thailand’s Centara Hotels & Resorts is scheduled to open Centara Grand Beach Resort Cayo Guillermo in late 2017.
Iberostar will unveil its eleventh property in Cuba by adding the Iberostar Playa Pilar on Cayo Guillermo, and the company is already working on another hotel, Iberostar Bella Vista, in Varadero.
Meliá Hotels & Resorts, the largest hotel operator in Cuba, confirmed the opening of Meliá Internacional in 2018, along with Gran Caribe. As for the company’s projects, the 400-room Meliá Trinidad will be managed along with Cubanacán. Paradisus Cayo Santa María, north of Santa Clara, is also slated to open in 2018 in partnership with Gaviota.
Carbonera Resorts Golf and Villas is no doubt going to be the biggest project of all, as the result of an alliance between CubaGolf and a British hotel group. Carbonera Resorts, located 115 km away from Havana and just 30 km west of Varadero, has been conceived as a 150-room hotel, but the plan includes an 18-hole golf course and 1,000 villas and apartments for lease.
Projects in the works
-Almendares Project: Wilton Properties, from Canada VOX 360, in an alliance with Gran Caribe, plans to build a state-of-the-art 363-room hotel near the estuary of the Almendares River in Havana.
-Jibacoa Project: A result of the agreement between Gran Caribe and Canada 360 VOX, the project would stretch out from Playa del Fraile to the area near Memories Jibacoa, including a 27-hole golf course, four hotels, villas and apartments, thus offering 3,474 accommodation capacities, as well as several leisure facilities.
-Bellomonte: A project between Beijing Holdings Ltd. and Cuba to develop an area that will include a golf course, hotels and condos in the area of Guanabo, Havana’s eastern beaches.
-Punta Colorada Marina: A project that is being negotiated by Spanish La Playa Golf / Resorts SL to build Punta Colorada Cuba Golf Marina at the faraway location of Punta Colorada, in the Pinar del Rio province.
-Rancho Luna-Pasacaballos: A development led by Grupo Financiero Urbas from Spain. It includes a compound of 1,500 houses and 3,000 apartments, plus several golf courses in Rancho Luna-Pasacaballos, near Cienfuegos.
-Chorrera-Ancón: A project to build two 18-hole golf courses, one hotel and 2,850 houses and apartments in Chorrera-Ancó, near Trinidad.
Sources: Cuba’s National Statistics and Information Office (ONEI), Xinhua, EFE, Skift and Caribbean News Digital (www.caribbeannewsdigital.com).
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