Secure capital for Cuban tourism
The current scenario would appear worrying: the cruise ships that entered the port of Havana on a daily basis have embarked on new routes, the number of U.S. citizens traveling to Cuba on commercial flights is likely to fall, and the full application of the Helms-Burton Act signals a series of lawsuits with no clear winner. In the midst of so many storm clouds surrounding Cuban tourism, there is at least one certain element: the continued interest of foreign investors to channel their money into destination Cuba.
Multimillion dollar projects, many of which are already underway with capital from increasingly diverse sources, include the construction of new hotels, the refurbishment of others to provide greater comfort, and real estate construction, including golf courses.
Havana remains the most attractive destination for investors. Two new hotels have already opened their doors this year in the Cuban capital: the Cueto and Vedado Azul; and in the coming months, the total number of rooms in Havana will increase, with the inauguration of a further nine facilities.
Money is not only flowing towards new buildings, but also to repair those damaged over time. Works to reconstruct the facades of two iconic Old Havana hotels, the Plaza and the Inglaterra, are already underway. Meanwhile, the Meliá and Iberostar chains are set to invest more than 20 million dollars to restore details of the Habana Libre and Riviera hotels, respectively.
Other destinations across the country have also received significant injections of capital. Hotels chains are hedging their bets on Trinidad, a key tourist hub in the central region of the island. Meliá and Iberostar will also fully fund the building of two new hotels on Ancón beach, the closest coastal destination to this city.
Looking a little further east, investors are interested in other tourist destinations that stand out for their natural beauty, such as the Ramón peninsula and Guardalavaca in Holguín, and Cayo Cruz in Camagüey.
One of the programs with the highest level of committed capital is linked to the creation of joint ventures for the construction of real estate that includes golf courses, stores, hotels and marinas. These projects, representing over 600 million dollars in investments, will be located in Bello Monte, to the east of Havana; Punta Colorada and La Altura, in Pinar del Río; and El Salado, in the Mariel Special Development Zone.
Perhaps the greatest current concern for foreign investors is the Trump administration’s full application of the Helms-Burton Act. The possibility of being brought before U.S. courts for using properties expropriated in 1959 paints an unfriendly picture for hotel firms.
However, major chains the likes of Meliá y Iberostar have already stated their commitment to continue doing business in Cuba, and invest more capital in the destination. Meanwhile, the Cuban government has assured that all companies operating in the country enjoy full legal safeguards under Law 118 on Foreign Investment, and Law 80 on the Reaffirmation of Cuban Dignity and Sovereignty.
Politicians from countries with major investments in Cuba have also stressed that they will fully support their companies in the face of lawsuits and potential appeals to the World Trade Organization.
The arrival of more foreign capital is a sign of investor confidence in Cuba; internationally recognized as a very safe country and with attractions that range far beyond sun and beach tourism.
Tourism in 2019:
· The investment plan in this sector is 3.46 billion dollars.
· There are currently 27 joint ventures constituted, 14 of which have executed investments, representing a total of 5,091 rooms in four and five star facilities.
· There are currently 20 foreign hotel chains operating on the island, and 94 hotel administration contracts with foreign firms.
· Plans are to close the year with 3,805 new rooms throughout the country and/or the recovery of 5,000 existing rooms.
· Included in the Portfolio of Foreign Investment Opportunities are 176 projects (hotels, recreational centers, marinas, and camping facilities).
Reasons why visitors choose Cuba
· Beaches: 28.2%
· Culture and Heritage: 22.4%
· People: 22.3%
· Safety: 12%
· Family and friends: 6.4%