Starwood executives detailed plans for the Four Points by Sheraton Havana, which will open in the capital city within the next two weeks.
NEW YORK CITY—Three months after announcing in March that it had become the first U.S.-based hotel company to receive authorization from the U.S. Treasury Department’s Office of Foreign Assets Control to operate hotels in Cuba, Starwood Hotels & Resorts Worldwide said on Thursday that it would open the Four Points by Sheraton Havana in the next two weeks.
Starwood unveiled plans for the conversion of the former Hotel Quinta Avenida at a press preview in New York.
The select-service hotel becomes the first U.S.-branded hotel to operate on the island in nearly 60 years and is part of the larger effort to normalize diplomatic relations between the U.S. and Cuba that President Obama initiated in late 2014.
The new 186-room Four Points is located in Havana’s Miramar neighborhood, which includes the country’s Embassy Row and is popular with business travelers.
“We chose the Four Points brand because of its focus on business travel as well as because the former Hotel Quinta Avenida was a good match to the Four Points profile,” Jorge Giannattasio, Starwood SVP and chief of Latin America operations, told HNN.
As part of the conversion process, technology upgrades were a high priority, sufficient Wi-Fi bandwidth included, to meet the expectations of U.S. travelers, whether business or leisure.
“To the degree possible, it was our job to build in all the Four Points brand standards so that guests loyal to the brand recognize it as a Four Points, just as we would in a conversion anywhere in the world,” said Trip Barrett, VP for Latin America brand management.
In March, Starwood also received authorization from the U.S. government to operate the Hotel Inglaterra in Havana’s city center. Dating from 1875, the Inglaterra is famous for being the country’s longest continually operating hotel. Scheduled to open before the end of the year, the 83-room hotel will be part of Starwood’s Luxury Collection.
In the case of both the Four Points and Luxury Collection conversions, Starwood will manage on behalf of each hotel’s owner. Given the nature of the Cuban system of government, ownership is with a standalone company—Grupo de Turismo Gaviota S.A. in the case of the Four Points, Gran Caribe in the case of the Luxury Collection property, Giannattasio explained. As distinguished from a privately held company, however, at some point each of these entities becomes a state-owned company.
In March, Starwood also signed a letter of intent to assume management of yet another Havana property—the Hotel Santa Isabel, which like the Inglaterra is slated to join The Luxury Collection. Plans for the Santa Isabel are still on the drawing board.
The Marriott acquisition
Considering that Marriott International is in the final stages of acquiring Starwood in a months-long, highly visible transaction valued at $12.5 billion, industry observers could well question the timing of Starwood’s expansion news in Cuba and other markets.
“We remain two competing companies, and until the acquisition officially closes, we’re competing for new hotel signings. All the projects in the Starwood portfolio are moving forward,” Brian McGuinness, SVP and global leader for specialty select brands, told HNN.
At this month’s NYU International Hospitality Industry Investment Conference in New York, Marriott International President and CEO Arne Sorenson resisted press entreaties to reveal when that deal closing would occur. According to Sorenson, it’s a regulatory issue that has to be respected. Three or four of the regulatory agencies representing international markets had not yet signed off. None, however, were what Sorenson described as deal-breakers.
Coincidentally, days after Starwood received a green light from the Treasury Department to expand in Cuba, the Treasury’s Office of Foreign Assets Control approved Marriott’s application to pursue business transactions of its own there. Marriott said it was in discussion with potential partners.
While acknowledging that they’re likely to face a learning curve moving forward in Cuba, Giannattasio and Barrett pointed to Starwood’s record of success in Latin American markets ranging from Argentina and Chile to Peru and Ecuador. “We were the first U.S.-based hotel company to establish a presence in a number of them,” Giannattasio said.
Barrett draws a comparison between entering a market like Eastern Europe after the fall of the Berlin Wall and the situation in Cuba today. “In parts of Eastern Europe, there was little hotel inventory to build on, which is not the case in Cuba. European and Canadian hotel companies have operated there for many years,” he said.
For U.S.-based companies, one challenge will be recruitment.
“While senior managers will be a mix of experienced local and international employees, line workers will need to be trained to our standards, which will vary from what they are used to,” Giannattasio said. English language fluency also will be a concern.
For its part, Four Points—the first Starwood brand to debut in Cuba—has been growing at a steady clip around the world.
“We’ve got roughly 225 hotels open, including 19 in Latin America, with a healthy pipeline, including both conversions and new-builds,” McGuinness said.
Giannattasio expressed confidence. “We’re trailblazers. A lot of the learning curve comes with being first to market.”