Impact of Meliá’s Withdrawal from Cuba’s Tourism Sector
Spanish hotel chain Meliá is scaling back operations in Cuba, joining other companies reducing their presence. The company will cease operations at 15 of the 34 hotels it manages on the island. This decision, reported by state website Cubadebate, is a response to new US sanctions and ongoing oil embargoes. Tourism in Cuba, a critical sector, has been in decline since 2018.
The decision comes shortly after an executive order by US President Donald Trump expanded sanctions against the island. These sanctions primarily target Grupo de Administración Empresarial S.A. (GAESA), linked to Cuba’s Revolutionary Armed Forces. The order restricts foreign company activities in the US financial system, which affects companies like Meliá, partnered with GAESA’s subsidiary Gaviota for hotel management.
According to Lee Schlenker from the Quincy Institute, the lack of international tourism combined with fuel shortages and the broader post-COVID downturn pressures companies to reconsider their Cuban operations. This has significant implications for the Cuban workforce, particularly those employed in hotels managed by Meliá and other foreign firms.
Many of the affected hotels, located in popular destinations such as Varadero and Cayo Santa María, had already closed due to energy issues and decreased demand. The Cuban government attributes these problems to the US energy blockade, which has caused widespread blackouts and disruptions in daily life and essential services.
Cuban workers in the tourism sector are concerned about Meliá’s decision. Erich López, a long-time driver, expressed worry about the impact on incomes. Similarly, Carlos Luis Carbonel, a parking attendant in Havana, noted the negative effects on various tourism-dependent occupations.
Other major hotel chains, such as Royalton from Canada and Spain’s Iberostar, have similarly reduced or paused their Cuban operations. The tourism sector, which reached 4.3 million visitors at its peak in 2019, has seen a sharp decline. This year, tourist arrivals in the first quarter were almost half of the previous year’s figures.
In Havana, changes are visible, such as the removal of the Royalton Paseo del Prado hotel’s signage and the closure of the towering Iberostar Selection hotel. Airlines like World2Fly, Air France, and Iberia have canceled flights, compounding the tourism crisis. Additionally, the Central Bank of Cuba suspended Visa and MasterCard operations due to foreign entities cutting ties with FINCIMEX S.A., another GAESA affiliate.
Commercial deals, such as a recent agreement involving Canadian miner Sherritt International Corp. to exit a mining partnership in Cuba, reflect the complex business climate. The Trump administration has threatened tariffs on oil suppliers to Cuba, hoping to pressure political changes. This move exacerbates the longstanding economic crisis fueled by decades of US sanctions.
US-Cuba tensions have increased despite recent diplomatic talks, highlighted by charges against former President Raúl Castro in a US indictment related to a 1996 incident involving civilian aircraft.