HAVANA, Cuba. – On March 15th, the Gran Aston Hotel was inaugurated as planned. Gran Aston belongs to Gaviota S.A. –which in turn belongs to the Armed Forces Business Enterprises Group GAESA- and is managed by the Indonesian group Archipiélago. Official news outlets have confirmed the news, but they have not stopped praising the magnificence, luxury and innovations of the new facility, located smack in the middle of Havana’s Malecón Boulevard. However, they have not mentioned that the hotel will remain practically empty for a few months, and that it’s not until late April of this year that they have some 40 guest reservations, mostly from Canada and the United Kingdom, according to information that CubaNet received from officials at the Ministry of Tourism on condition of anonymity.
According to the same sources, of the dozen guests staying in eight guest rooms in one of the hotel’s towers –between the two towers, they feature 600 guest rooms- only four are paying for their stay (notwithstanding the promotional discount of 40% of the actual price). The rest are either celebrities or representatives and officers of Archipiélago and GAESA who are staying at the hotel as “invited guests”, with access free-of-charges to all services available.
It’s a similar situation at the Gran Hotel Bristol La Habana, also owned by Gaviota S.A. but managed by the European chain Kempinski.
When this facility, which is located in the middle of Old Havana, officially opens its doors this week, its 167 guest rooms, spread over nine floors, will show only five or six of them occupied mostly by “special guests” invited to the opening ceremony on March 21st, all of them gifted with an entire week’s stay at the hotel free-of-charge.
“Of the twenty-plus confirmations we had this past January, mostly travelers from Russia, now we have only two (…). A guest from the United Kingdom and another one from India, the rest have cancelled,” according to a Gaviota S.A. officer interviewed by CubaNet. Our source also revealed other details regarding occupancy expectancy for the rest of 2022 in these two new hotels as well as other facilities Gaviota S.A. owns, which amounts to 56% of the hotel pool in the island and 90% of the best luxury facilities.
“We are redirecting and intensifying our plans toward the Canadian market mostly, more than to the British market, although we have made notable progress with the Brits (…). It’s a change in the initial strategy because for the time being we cannot rely on the Russian market (…). We only have serious reservations for the months of July through September, but the most important ones are for December and early 2023 (…). Still, nothing is certain, the strategy we developed for 25% to 40% discounted prices and no-fee cancellations in every facility is not paying off to the level we expected of the urban hotels. The Keys, more than Varadero itself, are absorbing the bulk of tourists, which means that these hotels –the Aston as well as the Bristol- will take a long time to yield what we anticipated four or five years ago when they were conceived of a scenario not as critical as today’s,” stated the officer.
The Telégrafo-Axel Hotel in the same predicament
Same goes for another Gaviota S.A. property, the one that would be the first LGBTQ+ hotel in the capital and the tenth facility of the Spanish hotel chain Axel, which comes immediately following the inauguration of Axel Beach in Miami in 2020.
Of the 63 guest rooms it features, only 10 have been rented to date, although five of them have been promoted under an unprecedented special discount offer (of up to 50% off for reservations greater than five nights), since the formerly Telégrafo Hotel opened its door on March 1st. The Telégrafo –now Axel- rises in the midst of a very popular (mostly) male prostitution zone which, in the 1970s and 1990s, was the site of daily episodes of police repression against homosexuals.
“Only one floor of the three in the facility are actively being rented, although most rooms have yet to be rented. I think we will end up with a pretty bordello for the Cuban market,” states the same hotel employee, who adds that, since inauguration, several Cubans have approached him to inquire about the cost of one night: “(…) male jineteros from the neighborhood who have heard about our gay-friendly policy and associate the hotel with the male prostitution that abounds especially at night around Parque Central. It wouldn’t be such a bad idea (…), after all we have not welcomed the first gay couple yet. We are in the same situation as before, when tourists came down, picked up the first pinguero –male sex worker- they found and brought him up to the room (…). This is prohibited, but, since things are so bad, we have to let them do as they please because, in the ultimate analysis, they are the only clients we have,” he concluded.
According to information provided by one an officer of Gaviota S.A., it was expected that around this time some fifty guests would arrive at the Telégrafo, mainly from Europe and Mexico. However, most of the reservations confirmed until today are scheduled for the months of December to February 2022, and they are from Italy, Spain, the United Kingdom, Mexico, Canada and the United States, where a fair portion of clients belong to the Cuban-American community in the U.S.
“We are placing our hopes on the arrival of Cubans who reside in the U.S. That is the principal market for Axel, more important than the European market (…). With the promotion of discounts, we already booked several reservations for mid-May, a substantial number of reservations for the months of July and August, and the most reservations for the end of this year and the first two months of 2023,” the Gaviota S.A. official explained.
“We’ve had to apply discounts of up to 50%; we’ve had to design packages from the Axel to Varadero at 25% of actual cost; free day-outings to Varadero, passes for discos and theaters, free meals, you name it, looking to generate international publicity instead of income (…). Income for March has hit rock bottom, and we’ll stay that way throughout 2022 and possibly into 2023, at least until October (…). It’s not just the case of Telégrafo, it’s the general tourism situation in Cuba,” were the Gaviota S.A. official’s closing remarks.
Discounts and special deals for Cubans: “we have no choice”
Other important hotel chains, like Meliá and Iberostar –two of the hotel chains that jointly with GAESA manage the most guestrooms in the island- also have been forced to use great discount deals to attract tourists to their near-empty hotels. They have also designed “packages” for domestic tourists, although foreign administrations do not like those arrangements for they have made them sell their product using the national currency, which is totally worthless.
While promotions aimed at international markets include discounts of between 25% and 40% -in Meliá’s case- the “deals” offered to domestic clients imply costs of between 30,000 and 60,000 Cuban pesos per person per night at Iberostar’s Gran Packard Hotel. However, even with such exaggerated rates, the results are neither a greater number of guests nor higher profits, which are nowhere near what was projected in 2019 for the present period. Back in 2019, nobody imagined that tourism would plummet more than 60% and, as a result, plans were made for the arrival of close to 5 million tourists.
“Today, the Packard (Hotel) is literally empty, last month we had a week when we didn’t have a single guest. Something similar is happening in March,” stated a Packard manager who was interviewed about the situation. “We rarely have guests staying for more than three nights. The average is 1.6 nights per guest. However, if you count the additional services they consume and you consider the length of their stay -where the majority of guests are Cuban nationals who come for a couple of hours for beverages at the terrace- then the average stay would be at 0.2 or 0.3, which tells you that this is a phantom hotel (…). Promotion of services in Cuban currency is a way of appeasing the Cuban government: it uses this data to say that they service a clientele in Cuban pesos. In practice, this neither solves the problem of having no guests, nor does it allow for making payments of any kind (…). Salaries continue to be paid by the employer; these are products and services that do not translate into profit (…). If I were to tell you what I really think, I would say that domestic clients do not represent the least benefit, unless he/she pays in convertible currency. If they pay with Cuban pesos, it’s a loss in every respect, but we have no choice,” according to a staff worker.
Delay, postpone, but never reject any new projects
According to the most recent statements of Cuba’s Minister of Tourism, Cuba continues to hope for an increase in the arrival of international tourists to the island to 2.5 million visitors, although the numbers for 2021 (when Cuba welcomed only 573,944 tourists) and for the first two months of 2022 (with less than 60,000 foreign visitors) do not forecast the tourism take-off they dream about, nor gives too many guarantees regarding occupancy for GAESA’s ambitious hotel investments plan. This plan aims to exceed by 5.7% the number of new guest rooms available in comparison to 2018 and 2019. Between both years, close to 9 million tourists arrived in Cuba, a bountiful moment during which the record number of 6 million tourists for 2030 was first planned.
With regard to what will happen with the new hotels to be inaugurated during the next months and years –taking into consideration the plans made during the bonanza years- several officers at the Ministry of Tourism whom CubaNet consulted assured us that there are no plans to stop the investment plan. They stated that the offers included in the Opportunities Portfolio for tourism in Cuba are still standing, with the same number of hotel and non-hotel projects –marinas, golf courses, theme parks and real estate development- although the execution of the projects is slowing down due, in part, to difficulties in importing resources and in obtaining external financing. The slowing down is also related to the possibility that many of these hotel facilities will become unnecessary.
“The policy would be to delay, to rethink the plan, but never to give up on the new projects. Maybe we’ll have to delay the completion schedules, but never stopping anything,” states an official at the Ministry of Tourism.
“Up until now, none of the projects has been halted, and with greater or lesser speed, we keep on building the 18 luxury-hotel facilities in Havana and in the other provinces (…). Those are the 18 hotels that must be ready to deliver no later than 2024. The rest of the projects could be slowed down depending on how tourism performs this year and in 2023,” according to our source.
This notwithstanding, workers at facilities-in-progress that are very important to the tourism sector, like the one on 23rd Street and “K” and the ones being erected in Havana’s Historic District, have informed CubaNet about significant delays in construction plans, which has negatively impacted on their ability to receive their salaries. In that respect, rumors among scared workers convey a preoccupation about construction being halted indefinitely, which in turn would mean the loss of thousands of jobs.
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