Starwood, Marriott get government approval for Cuba hotels

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The Hotel Inglaterra will join Starwood's Luxury Collection.
The Hotel Inglaterra will join Starwood's Luxury Collection. Photo Credit: Johanna Jainchill

Starwood Hotels & Resorts and Marriott International have each been approved by the U.S. Treasury Department to operate hotels in Cuba, clearing the way for the first U.S. hospitality operations in the country in almost 60 years.

Starwood on Saturday said it would begin Cuba operations by the end of the year. The company, whose brands include Sheraton, W and Westin, received approval to make Havana’s 83-room Hotel Inglaterra part of Starwood's Luxury Collection and reflag the city’s 186-room Hotel Quinta Avenida under Starwood’s Four Points by Sheraton brand, with both hotels slated for renovations.

Starwood also has a letter of intent with Habaguane, owner of the 27-room Hotel Santa Isabel, for that hotel to also become part of the Luxury Collection, though that agreement still needs to be approved by the U.S. Treasury Department.

“There is no question the entire U.S. hospitality industry has watched Cuba with great interest, and we are thrilled to lead the charge and bring our sophisticated, high-end brands into the market at this inflection point,” Starwood CEO Thomas Mangas said in a statement Saturday.

Marriott said Sunday that it, too, had received U.S. Treasury Department approval for Cuba operations. The largest U.S. hotel company by revenue is “in discussions to develop a hospitality relationship with potential partners,” though no specific projects or properties were mentioned.

“We are gratified to receive permission from the U.S. government to pursue business opportunities in Cuba,” Marriott CEO Arne Sorenson said in Sunday’s statement. “While there is still work to do before any agreement is reached, we are actively pursuing relationships in the hospitality sector."

Sorenson made the announcement while in Cuba as part of a U.S. delegation that includes President Obama.

The announcements reflect continuing efforts by both U.S. officials and the travel industry to open up Cuba to U.S. tourists. The Obama administration announced last week that, starting March 16, Americans will be allowed to make "individual people-to-people educational” trips to the island, without having to travel with an authorized people-to-people group.

Additionally, the U.S. and Cuba signed an agreement last month that will enable the reestablishment of direct commercial flights between the two countries for the first time in more than five decades. Under the agreement, each country can authorize up to 20 daily commercial round-trip flights between the U.S. and Havana. In addition, carriers from each country can offer up to 10 daily round trips between the U.S. and each of Cuba’s nine other international  airports.

Starwood and Marriott’s plans also follow a March 8 open letter U.S. Sen. Amy Klobuchar (D-Minn.) sent  to Secretary of Commerce Penny Pritzker and Secretary of the Treasury Jack Lew urging the federal government to amend regulations to legally allow for U.S. hotel operators to build hotels in Cuba. Klobuchar is part of the U.S. delegation that’s in Cuba.

So far, lodging exposure among U.S. companies has been limited to peer-to-peer accommodations service Airbnb, which last spring started allowing Cubans to list their properties. Airbnb currently has more than 2,000 Cuba properties on its site.

Among international hotel companies, Spain-based Melia Hotels International has 28 hotels in Cuba, while Paris-based AccorHotels has three, including the 568-room Pullman Cavo Coco, which opened last December.

“In Cuba, we’re ahead of you in many ways,” AccorHotels CEO Sebastien Bazin said to Hilton Worldwide CEO Christopher Nassetta and Hyatt Hotels CEO Mark Hoplamazian in a panel discussion at the NYU International Hospitality Industry Investment Conference in New York last June. “But you’re going to catch up, and you’re going to beat me up.”

Marriott in November reached an agreement to acquire Starwood, though Starwood said Friday that it would accept a higher bid from a group led by China-based Anbang Insurance Group. Marriott has until March 28 to make a counter-offer.

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