Starwood Hotels & Resorts Worldwide has said it will start operations in Cuba. In an announcement made on 19 March, Starwood said it will take over the management of three hotels in Havana involving multimillion dollar investments. While two of the hotels located in the Cuban capital will be managed and marketed by Starwood, it is known to have signed a letter of intent to operate a third property.
While the development came a day before US President Barack Obama visited Havana, it marks the first US hotel to enter into any sort of transaction with Cuba since the 1959 revolution. The deal is also the first by a US company since Fidel Castro, the Cuban politician and revolutionary, overthrew a pro-American government in 1959.
Such deals are usually not allowed by the US as they are prohibited under a US embargo against Cuba. However, according to reports, the US Treasury Department recently issued special permissions to Starwood after which the Connecticut headquartered company went ahead with the Cuban deal.
While the standoff between Cuba and the US was on for decades, the Obama administration eased some restrictions, including Americans being allowed to travel to Cuba. The country's tourism has since boomed. In 2015, Cuba saw a 17% increase in international visitors with the inflow of Americans alone rising by 77% to 161,000.
Obama is expected to further ease tensions between the two countries during his visit. He is expected to reveal more US investment with airlines and cruise owners keen to take part in Cuba's booming tourism industry.
Jorge Giannattasio, Starwood's chief of Latin American operations, said: "The amount of travellers will skyrocket with direct flights."
While Cuba's military-owned Gaviota 5th Avenue Hotel will be operated under StarWood's Four Points Sheraton brand, the Cuba state-owned Gran Caribe Inglaterra Hotel will be made part of Starwood's Luxury Collection brand. Giannattasio said it will have to invest millions of dollars to revamp the hotels to get them up to its standards.