Starwood Hotels & Resorts has become the first U.S. hotel company to secure a commercial agreement in Cuba since the 1959 revolution. With authorization from the U.S. Treasury Department, Starwood announced a multimillion-dollar investment to restore and operate properties in Havana—transactions that would otherwise be restricted under the U.S. economic embargo.
In addition to a recent announcement that it will acquire Marriott for $13.6 million, Starwood will manage and market two Havana hotels and plans to operate a third property. According to Jorge Giannattasio, chief of Latin American operations for Starwood Hotels & Resorts, the agreement includes a “multimillion-dollar investment to bring the hotels up to our standards.”
This move represents the first substantial U.S. corporate presence in Cuba’s hospitality sector since the revolution, which led to nationalization of the tourism industry. Starwood’s entry reflects both a strategic business decision and a response to changing U.S.-Cuba policy that has opened new commercial opportunities.
Cuba’s tourism sector has experienced significant growth in recent years. International arrivals reached a record 3.5 million in 2015, a 17 percent increase, while visits from the United States rose 77 percent to about 161,000—still a modest figure but one that signals a rising trend. Continued growth is anticipated as more direct flights from the United States are introduced and travel restrictions are further eased.
By investing in renovations and management expertise, Starwood aims to position these Havana properties to meet international standards and benefit from the island’s expanding tourism market. The company’s move is likely to encourage additional investment and attention from other international hospitality brands as Cuba’s travel sector modernizes and demand increases.