Spanish chains welcome US competitors in Cuba
03 FEBRUARY 2016 8:16 AM
As global businesses anticipate the lifting of the embargo between the U.S. and Cuba, hoteliers of Spanish chains already thriving in the country await the new competition once U.S. hotel brands are allowed in the market.
MADRID—Spanish hotel chains, some with decades of experience as the leading operators in Cuba, are looking forward to the expected influx of American visitors, planning new openings and overhauling their existing properties to meet the demand, sources said.
And although the move to lift travel restrictions on U.S. passport holders has yet to occur more than a year after the United States and Cuba announced international relations would resume, executives from several Spanish chains active in the Caribbean country said they are confident good times are coming.
“According to an American travel agents association, between 1 million and 1.5 million American tourists will visit Cuba over the next 10 years,” said Francisco Camps, Meliá Hotels International’s deputy general manager for Cuba.
The Spanish hotel group is the biggest foreign operator in Cuba. The company opened its first hotel there in 1990 and now boasts 28 properties under four of its brands with more than 13,000 rooms, or 21% of total room capacity in the country.
Meliá has three more resort properties in its Cuban pipeline, totaling almost 2,140 rooms.
A Spanish newcomer to the market, Sercotel Hotels, opened its first property in Cuba this month, the 324-room Sercotel Club Cayo Guillermo. The company also is building the 660-room Sercotel Cayo Santa Maria that is expected to open early next year.
“Our team is also working on potential projects in the main destinations like Havana, Trinidad and the resort city of Varadero,” said Sercotel associate general manager Javier Garro Arza, adding that the expansion plans were well underway before the U.S.-Cuban agreement was announced.
Garro, like other executives of Spanish chains in Cuba who spoke with HNN, said he sees no threat from U.S. hotels entering the market.
“More Americans will be very good for Cuba; demand will increase so there will be more hotels opening, more product on offer and more destinations on the island,” he said. “The entrance of new chains from different countries will be good for the sector and generate more competition.”
Pablo Servera, CEO of Blau Hotels & Resorts, agreed. The company operates five 4- and 5-star resort properties in Cuba totaling 2,271 rooms.
“I don’t see any danger from the big American groups,” Servera said. “In other Caribbean destinations like Cancun, the Dominican Republic and Jamaica, large, medium and small chains coexist with no problems.
“What’s important is the product, and if you have a modern, attractive product with high standards and the best service at a fair price, success is assured.”
Reinvesting and renovating
According to sources, many American visitors will be expecting the same upscale experience they are accustomed to at other Caribbean destinations. Existing hotels will have to up their game, but it will take time.
“Cuba is waiting for the embargo to be over and they have in mind a big boost in hotel growth, not only in quantity but also in quality when the major U.S. chains come in,” said Arturo Garcia Rosa, president of the hotel consulting group RHC Latin America and founder of SAHIC.
According to Cuban authorities, there are 63,000 rooms on the island, mostly 4- and 5-star properties. The goal is to add about 24,000 more rooms over the next five years.
“It’s difficult enough now to find a room in the high season, so when the embargo ends, there certainly won’t be enough capacity and rates will go up,” Garcia said. “But for the time being, quality will remain the same until existing hotels are refurbished and the new ones open.”
Blau Hotels’ Servera said that while some of the more modern hotels will meet American standards, most will have to invest heavily in renovations.
“New hotels will also have to be built because the current offer just won’t be enough to meet the demand of the strong U.S. market,” he said, adding that his company is planning its own renovations and studying new projects.
Meliá’s Camps said his company is looking to extend its offering.
“By mid-2016 we’ll be extending the capacity of the Paradisus Varadero by adding 284 new rooms for our ‘Family Concierge,’ an innovative luxury concept targeting families,” Camps said. “Besides the growth in the resort segment, we aim to grow further in Havana by establishing new urban brands such as Me by Meliá, Gran Meliá and Innside focused on the ‘urban leisure’ concept, which we expect to satisfy the most demanding guests such as those from the United States.”
What can Americans expect?
The executives lauded their Cuban employees for their training and what Camps called their “incredible hospitality culture, natural warmth and service vocation.”
Garro said Sercotel had encountered no significant problems operating in Cuba, while Servera told HNN that it can be a challenge to work in a developing country with a different social and political environment.
However, he added, “it is rewarding to do a good job which is valued by the Cuban people.”
At last month’s FITUR tourism trade fair in Madrid, Cuban Tourism Minister Manuel Marrero Cruz praised Spanish hoteliers for all they had done for the sector but said the game would change when American chains set up operations.
“We would never turn our backs on those who during difficult times and under pressure put their trust in Cuba and we’ve returned the favor by providing investment opportunities,” he said.
“Cuba will not become Americanized. (The U.S. chains) will dance to our tune,” Marrero said, but added, “The arrival of U.S. companies will be positive as it will mean more competition and a higher-quality product.”