Starwood & Airbnb sign new deals to expand in Cuba

Starwood & Airbnb sign new deals to expand in Cuba

HAVANA — Following President Obama’s historic arrival in Cuba last weekend, Starwood and Airbnb have announced moves to offer accommodations in the island nation.

Starwood signed a deal over the weekend to renovate and run three Cuban hotels, a milestone agreement that returns U.S. chains to Cuba more than 50 years after American hotels were taken over by Fidel Castro’s socialist revolution.

All Cuban hotels are state-owned so the deal puts a major U.S. corporation directly in business with the Communist government and under a special U.S. licence that pushes Washington’s legal dismantling of the Cuban trade embargo further than ever before. In a once unimaginable arrangement, a hotel owned by the tourism arm of the Cuban military will become a Sheraton Four Points.

Starwood’s chief of Latin America operations, Jorge Giannattasio, said the company will invest millions to renovate and rebrand the Quinta Avenida, Santa Isabel and Inglaterra hotels, train and hire new staff and reopen the hotels by the end of the year. The Quinta Avenida is owned by Gaviota, a military-run tourism conglomerate. The Santa Isabel and Inglaterra, which are run by other state agencies, will be operated as part of Starwood’s Luxury Collection brand.

According to Giannattasio, the Cuban Starwood hotels will be refitted with everything from new mattresses to improved kitchen equipment and safety measures, and will be managed by teams of expatriate Starwood employees.

Cuban law prevents widespread direct hiring of Cuban workers by foreign firms. International companies complain that their inability to directly hire Cuban employees, and if necessary demote or fire underperforming staff, hinders their ability to provide satisfactory customer service.

Giannattasio said he was confident that Starwood would have enough flexibility and control to maintain the company’s standards in Cuba.

Meanwhile, online lodging service Airbnb has announced that it is allowing travellers from around the world to book stays in private homes in Cuba after receiving a special authorization from the Obama administration.

The San Francisco-based company was the first major American company to enter Cuba after Presidents Barack Obama and Raul Castro declared détente on Dec. 17, 2014. The service handles online listing, booking and payments for people looking to stay in private homes instead of hotels. Cuba has become its fastest-growing market, with about 4,000 homes added over the last year.

Airbnb had only been allowed to let U.S. travellers use its services in Cuba under a relatively limited Obama administration exception to the half-century old U.S. trade embargo on the island.

Airbnb said world travellers can begin booking in Cuba on April 2, the anniversary of the country’s start of operations on the island.

The number of visitors to Cuba surged nearly 20% last year, with nearly 80% more Americans flying to the island. The surge has overwhelmed Cuba’s poor tourism infrastructure and left hotels above capacity. Numbers are expected to rise even more sharply this year with the start of as many as 110 commercial flights a day from the U.S.

Last week, the Obama administration removed the last meaningful restrictions on travel to Cuba, announcing that it would allow individuals to visit the island for ‘people to people’ educational trips. While the ban on U.S. tourism technically remains in place, it becomes an honour system that is essentially unenforceable.

Get travel news right to your inbox!