CUBANET ... CUBANEWS

July 6, 2001



Cuban hotels industry thriving with foreign partners

Source: Deutsche Presse-Agentur (dpa). Hotel Motel Managment. July 05, 2001

Havana (dpa) - Following the boom in Cuba's tourism industry inrecent years, there is now a strong upswing underway with jointventure projects.

From now on, all new projects for large-sized hotels of the four-and five-star category for the socialist country's state-owned hotelchain will be realised only via capital investment and managementagreements with foreign partners.

This has been confirmed by Emilio Falcon, president of the Cuba'shotel federation, who inists: "Every deal we make is a good one."

The fact that foreign involvement as a rule may not exceed 50 percent is no hindrance, Falcon says. He regrets the fact that so farGerman involvement in Cuba has been restricted to the management ofvacation hotels.

According to the Tourism Ministry, at the start of 2001 there were27 hotel companies involving foreign partners, combining for acommitment to build 15,600 rooms. So far, 3,700 rooms have beencompleted.

At the same time, 50 out of the 227 hotels meant for foreignvisitors to Cuba are under foreign management, with this trendstrongly on the rise. At the end of 2000, there were 36,000 hotelrooms in Cuba, while by the end of this year the figures is to reach40,000 rooms.

Many foreign hotel partners are manager and shareholder at the sametime, in some cases the stakes being just 20 or 30 per cent.

"We have capital shares in some of our hotels," notes CarlosVillota, general manager of the Melia Cohiba Hotel in Havana. The SolMelia company was the first foreign partner for Cuba, and in themeantime the Spanish group will soon be managing 23 hotels, three ofwhich are under construction.

Villota said that the Melia Cohiba hotel is booked to 76 per centcapacity, at a room price of 215 dollars.

A number of hotels have more than two partners. For example, theCuban and Dutch flags fly atop the Golden Tulip Parque Central indowntown Havana.

The state hotel chain Cubanacan is 50 per cent owner, while theDutch manage the hotel and investors from four countries, includingfrom Britain and Italy, hold the remaining stake.

"This is working excellently," said Falcon, who is resident managerof the hotel.

Other foreign hotel management groups who are satisfied with thesituation include Super Clubs, LTI and Oeger. They have set upoffices and are aggressively advertising their products. By contrast,foreign capital partners, for example from Canada or Sweden, are lesshungry for publicity.

Oeger Tour has shelved earlier plans to participate financially ina 1,000-bed complex on Cayo Coco.

"We are going to operate and manage the facility because that ischeaper," said company spokesman Ingo Thiel, while saying in this wayOeger's standards can be guaranteed.

LTI marketing chief, Monika Singer, says that her company is "verysatisfied with the cooperation" with the Cubans. Soon the LTIVaradero Beach Resort with 400 rooms is to be opened, followed nextwinter with the 317-room LTI Panorama Havana. This will bring to fivethe number of hotels under the group's management.

Meanwhile Jag Mehta, a consultant to Super Clubs, reports that "weare making good profits". Last February, the all-inclusive hotelmanagement company from Jamaica opened the Breezes Costa Verde hotel,with 480 rooms, in Holguin. Owners are Cubanacan and an Italiangroup.

"The interest of foreign partners has grown strongly," said MarioSori, vice president of Cubanacan. "We would be very pleased about ajoint venture with Germany."

Manuel Estefania, vice president of the Gran Caribe company, notesthat "the Germans bring us the most tourists, but are still reservedabout investing".

At the end of 2000, Gran Caribe had 41 hotels with 10,300 rooms,and the chain now has lined up four capital partners - two fromCanada and one each from Italy and Sweden - for major new projects.Meanwhile classic hotels like the Inglaterra and Plaza in Havana havebeen modernised and are being operated by Gran Caribe itself.

The ongoing boom in vacationers is expected to add further momentumto joint ventures. The number of visitors from around the world rosefrom 1.603 million in 1999 to 1.774 million last year. Of that,Germans accounted for 182,159 and 203,403, respectively. Cuba'stourism income is now running at about two billion dollars a year.

Copyright 2001 Hive4.com

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