Starting this February, a concise note from the Cuban News Agency (ACN, by its Spanish acronym) which was shared by other official news media, announced the construction of a new hotel in a notorious lot in El Vedado, located on “P” Street between 23rd and Humboldt, on La Rampa Boulevard. However, in a statement made by the project’s investor who was interviewed for the occasion, there is only reference to the demolition of old and deteriorated structures and absolutely nothing is said about who is carrying on this work, or about what the hotel will look like, or what companies are the owners.
But for the use of a fence to close off the street where one reads “Hotel under Construction”, there are no details in the news that can truly confirm that a hotel is being built, especially when none of the Opportunities Portfolios for foreign investment that have been published by Cuba’s Chamber of Commerce to date make reference to any construction on that lot, one of the highest assessed in the area due to its location. So, it begs the question: is it true that a hotel is being built on the ruins of the former Moscú Restaurant? And if that’s the case, who is making the general investment.
Following the press note, the official press hasn’t mentioned another word, in spite of the fact that nothing is being made clear about the construction work which has sparked curiosity among passer byes and also among the construction brigades working there. In fact, even though the site is located across the street from a television station (Educational Channel), there has been no reporting where details could be shared about what will become of the once glittery and famous Montmartre Nightclub and later, during the Sovietization in the 1960s by the Castros, the Moscú Restaurant. The restaurant vanished in a mysterious fire in mid 1989 (which coincided with the collapse of the Soviet Union).
Not even the construction workers who are doing the demolition are informed about what will be erected there once they finish prepping the lot. According to what CubaNet has ascertained in situ, even the top personnel responsible for the supervising the work speculates about what will happen there. The fence used to close off P street was placed there “because the supervisors could not find another one,” according to one of the brigade chiefs with whom we were able to talk.
“We used that [the fence] because there was nothing else. Someone brought it and we placed it, but no one here knows what will be built here. We came only to demolish (…). There are several brigades here, we belong to a private cooperative (…); some were hired by Palmares S.A., others directly by the Ministry of Tourism, and there are two more brigades that belong to the State: one belongs to the Ministry of Construction and the other one I believe belongs to the People’s Assembly. This has nothing to do with Gaviota S.A. or with military construction,” stated a demolition worker on condition of anonymity.
Gaviota is enraged when it finds out through the press
“Nobody knows,” I think it will be a hotel,” They say it will be a commercial mall,” “It’s a tourism warehouse,” “They will rebuild the Montmartre.” These are not the opinions of passer byes but instead the answers CubaNet received from people who are directly involved with the work.
The orders they received were to demolish and prep the lot, and that is just what they are doing. They know nothing more. Workers’ salaries come from a variety of sources, including the municipal government, and the contracts signed will expire in a few months when, before 2022 ends, they have to deliver the ground totally cleared, without trace of what was there before, with the exception of a few fragments of the façade which, from the condition they are in, might as well be torn down. “We will do all that’s necessary to salvage them,” stated a construction worker.
Due to the scarce information obtained at the site, CubaNet dug up inside information at the Plaza Municipal Government, at the Ministry of Tourism, as well as at Gaviota S.A. Most answers reveal the confusion that a rushed project stemming from improvisation has generated. It has sparked angry claims from [the Armed Forces military business consortium] GAESA to the Ministry of Tourism as to why it was not informed of the final decision about a lot that is of special interest to GAESA. GAESA interests are a priority established as “unwritten rule” and subject to compulsory compliance when it comes to tourism investment in the island.
“You won’t believe me when I tell you that GAE (GAESA) found out through the press. The news has been a bombshell,” according to a Gaviota S.A. worker that CubaNet interviewed, as well as other workers and officials, all on condition of anonymity.
“No one at GAESA knew that this earth-moving work had started, no one sent notice about the assignation of the lot, even when it’s in a super special area where GAE (GAESA) has priority. (…) The norm is to notify GAE, and if we are not interested then it is the prerogative of the Tourism Industry, and as a last recourse, of the municipal government to make a decision, because this is a high priority lot for investments, always in prior consultation with GAE,’ stated an official, who went on about the sense of alarm and discontent inside the military consortium that, at present, is making rights claims over the lot.
“Before the note was made public, Gaviota was already filing claims at MINTUR because a few days before, there were photos (on social media). I, who walk by the place every day, asked myself the question because we have no projects there. This is being talked about still because it’s a lot of priority interest for Gaviota. Not for right now, but for future projects; in addition, that was a lot that Eusebio [Leal] had special interest in; he always said that the only thing that could be built there was another nightclub. His idea was to reconstruct the Montmartre, so no one was thinking of erecting a hotel there. If they wanted a hotel, they had to recreate the Montmartre first. That, or nothing,” stated the official.
Hotel, nightclub, commercial mall or an all-in-one
However, according to the opinions we gathered, there will be no single hotel or nightclub erected in that lot, but a great commercial mall on the ground floor instead, with areas for restaurants and nightclubs in the basements and on the upper floors, as well as warehouses. This according to information given to CubaNet by officials at the Tourism Ministry and at the Plaza Municipal Government.
“There is still no approved project nor an official assignment of the lot because it did not belong to Palmares,” states a female official at MINTUR. “As far as I know, no one had to notify GAESA because the lot had long belonged to Abatur (Empresa de Abastecimiento al Turismo, the tourism supplies distributor), and also because it posed a danger due to its ruinous condition in the middle of La Rampa boulevard. So, they were forced to demolish it and to present a project and from there it ended up with Palmares (…). In reality, the fire at the Moscú Restaurant started in Abatur’s offices, which were located in the same building. The confusion stems from the “Hotel under Construction” sign, but Palmares is a non-hotel company which services the tourism sector, it is not involved in hotel construction. (…) Last I heard, whatever is built there will be managed one hundred percent by CubaSol S.A. (an umbrella for companies that service the tourism sector like Caracol, Transtur, Marlin and Palmares S.A., among others) but without foreign capital for investment,” stated the official.
However, other sources state that the loti s being reclaimed for a small city hotel which will be managed by the French company Accor, and whose owner would be the military construction entity Almest S.A., which belongs to GAESA.
“It will definitely be a hotel, although at street level there will be commercial space and nightclubs, piano-bar, all under the name Montmartre,” states the Cuban director of an European company established in the island that is interested in managing one of the commercial spaces at the future facility.
“The idea belonged to Palmares, without a hotel, but now control will be transferred to GAE (GAESA), and the hotel is a sure thing on the upper floors, above a commercial gallery similar to that of the Manzana Kempinski Hotel, all very exclusive. (…) Gaviota will not manage the complex, not even the hotel, that will go to Accor which has been asking for a long time for a spot in El Vedado (…). It was proposed to Accor to manage the hotel at K and 23rd [popularly known as the “K Tower” across from the Coppellia ice cream parlor] but Accor turned it down (…) because there is no certainty that it can be booked to more than 50% capacity. Not even Gaviota wants to manage the “K Tower”. They are looking frantically for someone to join them in dealing with that monstrosity,” states our source.
GAESA’s ambition is more powerful
The hotel or commercial gallery-hotel that will probably be built on the ruins of the Moscú Restaurant apparently was never in GAESA’s plans. The lot on “P” Street where it will be located is not described or proposed on any of the Foreign Investment Opportunities Portfolio elaborated by Cuba’s Chamber of Commerce since 2013 until the most recent one in 2022 where, in contrast, other important lots have been listed, such as the square block lot of the Payret movie and theater house, and the “K” Street and 23rd lot, where at present there are several hotel projects underway for the tourism sector.
In fact, the latter, officially named “Lot 11” and popularly known as the “López-Calleja Tower” (after the general who is president of GAESA and former son-in-law of Raúl Castro), is included in the 2022 edition as a hotel project still in search of management and marketing by a foreign company. This, in spite of the fat that two years ago, in a note published in the official daily Granma, it was announced that the hotel would be managed in full by Gaviota S.A., without any foreign participation whatsoever. Without a doubt, in light of the critical tourism situation, the super-hotels that have been constructed are beginning to become white elephants that cannot be handled.
The same thing is happening with the hotel on 1st and “B” (officially named “Lot 5” and christened as Hotel Grand Aston for marketing purposes) whose inauguration is set for March 15 although occupancy will not be above 20% at best.
“Things are not going well. They’ve had to go out to get help because otherwise these hotels will report loses, as there is no projection of occupancy above 20% of capacity, not even in an optimistic, five-year projection. Simply stated, the expected number of tourists will not materialize, and now they want to pass the problem on to others like a hot potato,” stated a Gaviota S.A. official to CubaNet.
“They continue to build because it’s a booming business, where resources are maneuvered at such volume, the money is difficult to control. It doesn’t matter if when the hotels are finished they are filled to capacity or remain empty; the entire process generates money for the elite in power, lots of money (…). And so, they will continue to insist that these are necessary investments when everyone knows that the hotels will remain empty (…); they already acknowledged that they cannot handle “K” and 23rd, or 1st and “B”, but that does not deter them. They see that the Moscú Restaurant lot is being cleared and they want it, they fight for it because to build is to make money (…). What they need now is some idiot who will believe that the hotel facilities will be occupied to 80%. How can they attain that if there are no tourists? There won’t be any tourists for a long time, certainly not the high-standard tourists they are counting on and for whom Cuba is not prepared as it has nothing to offer beyond sun, beaches and jineteras, i.e. young prostitutes. Whoever accepts the offer of managing those hotels better be ready to lose money. These people are scoundrels,” states the official.
The arrival of tourists to Cuba in 2021 dropped 67%, according to data published by the National Office of Statistics and Information (ONEI, by its Spanish acronym), which means 573,944 travelers of the 3 million that were forecast in 2018.
This notwithstanding, the Tourism Ministry hopes to complete more than 100,000 hotel guest rooms by 2030, as it is counting on welcoming more than 6 million visitors. Most of these hotel guest rooms, or at least the best among them, will have been constructed by GAESA through projects (hotels and non-hotel facilities alike) that add up to investments of over US$1 billion, as promoted in the most recent Opportunities Portfolio.
That is the case of the Malecón and 7th Lot, available for the construction of a five-star hotel featuring 300 guest rooms, valued at US$ 90 million; the Línea and Paseo Lot, featuring 200 luxury guest rooms and valued at US$40 million; and the 23rd and “B” Lot in El Vedado, available for construction of a 150-guest-room hotel, valued at US$30 million.
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