Starwood Hotels and Resorts Worldwide on Saturday became the first US hotel company to sign a deal with Cuba since the 1959 revolution, announcing a US multimillion-dollar investment a day before US President Barack Obama was due to visit Havana.
Starwood is to manage and market two properties in Havana and has signed a letter of intent to operate a third.
Such deals would normally be prohibited under the US economic embargo of Cuba, but Starwood received special permission from the US Department of the Treasury last week.
Photo: AP
Latin American operations chief Jorge Giannattasio said the deals included a “multimillion-dollar investment to bring the hotels up to our standards,” making Starwood the first US company to commit major money to Cuba since former Cuban president Fidel Castro and his supporters overthrew a pro-US government on Jan. 1, 1959.
Castro quickly nationalized the tourism industry and made the Habana Hilton the new government headquarters for months.
Cuba’s tourism industry has boomed since the December 2014 rapprochement with the US. International visitors rose 17 percent to a record 3.5 million last year, including a 77 percent increase in US visitors to 161,000.
Cuba expects a similar increase in US visitors this year when scheduled airline services are to resume despite a continued ban on tourism. Americans are allowed to travel to Cuba for 12 authorized purposes.
“The amount of travelers will skyrocket with direct flights,” Giannattasio said.
Obama relaxed restrictions further this week. Americans no longer need special permission to travel, or use guides, but must self-police their activities and keep records for five years.
Obama has called for the US Congress to do away with the 54-year-old embargo, but has been opposed by the leadership of the US Republican majority.
Starwood is to operate the military-owned Gaviota 5th Avenue Hotel under its Four Points Sheraton brand and the state-owned Gran Caribe Inglaterra Hotel under its Luxury Collection brand.
The deal could help Obama use his historic trip to showcase what he sees as the benefits of Washington’s diplomatic opening with the former Cold War foe after decades of hostility.
However, Starwood, which is subject to a takeover battle, might not be American for long.
China’s Anbang Insurance Group Co (安邦保險集團) made a US$13 billion cash offer for Starwood on Friday, surpassing by nearly 15 percent a previous cash and stock offer by Marriott International Inc.
Marriott has until March 28 to make a counteroffer.
“We do not comment until a deal is executed,” Giannattasio said.
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