Meliá Hotels International Pulls Back From Cuba's 15 Hotels
Meliá Hotels International is among the hotel companies pulling back from Cuba after a May 1 Trump executive order widened U.S. sanctions to reach any foreign person operating in any sector of the Cuban economy. The move is already pushing some hotel management to shift away from GAESA-linked properties before a Friday grace period ends.
Cuba on Tuesday defended GAESA and denied corruption claims in a statement, even as the U.S. government accuses the military-run conglomerate of secretly hoarding profits from Cuba's most valuable industries. Outside estimates put GAESA's control of the economy at between 40 per cent and 70 per cent, and many of Cuba's five-star hotels fall within that range.
Blue Diamond and Iberostar
viewed brief statements sent to tour operators serving Cuba by Blue Diamond Resorts of Canada and Iberostar of Spain. Both companies said they were severing ties with GAESA-linked and sanctioned hotels, marking a clear retreat after the executive order broadened the sanctions risk for foreign firms in Cuba.
Blue Diamond will pull out of Cuba altogether and leave 15 hotels under various chains. Iberostar will continue to manage some hotels not tied to GAESA, but management of some hotels once run by Iberostar would transfer to GAESA-linked tourism firm Gaviota, according to two industry sources. Prices and packages for the hotels once managed by Iberostar would remain available through October, those sources said.
GAESA and Gaviota
The dispute centers on GAESA, a military-run conglomerate Cuba says is not an opaque structure or parallel to the Cuban state. Cuba rarely speaks publicly about the group, saying such secrecy is necessary to get around U.S. sanctions, while the outside estimates cited by industry sources show how deeply the company is tied to the island's tourism sector.
The pressure is not limited to hotels. The open-ended executive order has prompted CMA CGM and Hapag-Lloyd to suspend bookings to and from Cuba until further notice, a step that could jeopardize as much as 60 per cent of Cuba's shipping traffic by volume. Several airlines, including Russia's Rossiya and Air Canada, have also suspended service to Cuba amid a jet fuel shortage and plummeting tourism.
Friday Grace Period
For travelers, tour operators and hotel staff tied to these properties, the practical shift is immediate: some brands are leaving the island, some hotels are changing management, and some rates already remain on sale through October. The Friday deadline forces companies to decide whether they can stay in Cuba without crossing the new sanctions line, and the changes now underway suggest the answer for several chains is no.
