By SE Lewinski

HAVANA TIMES – The Cuban government disguises government and military owned hotels by outsourcing their management to foreign entities. These companies present the hotels as their virtual properties for marketing, webpages, sales, monetary exchange, and of course management. The contents of this article will convey the schemes used to utilize a capitalistic structure in a state-owned economy to gain monetary value for the island’s subsistence.

Government Outsourcing of Hotel Management

In their study, Julio Cervinino and Jaime Bonanche from the Carlos III University in Spain wrote: “Outsourcing hotel management in Cuba requires navigating significant regulatory hurdles, as the Cuban government must approve foreign investment contracts and often retains a majority stake. Foreign companies must partner with Cuban state-run entities, understand the complex hiring processes through government agencies, and align with Cuban priorities, such as providing local employment and training.” 

As noted by Jessica Dominguez Delgado (El Toque 2023): During the 2023 International Tourism Fair (FITCuba), Cuban Prime Minister Manuel Marrero reported the statistics —18 foreign managements running 113 contracts covering 65% of hotels, plus 24 mixed joint-venture companies managing about 5,000 rooms.

Though some of the hotel management includes foreign ownership, it’s not the dominant business model on the island. For example: Melia Hotels manages five hotels through joint enterprises, they have made minimal capital investments: Melia continues to operate primarily as a manager.  On the other hand, Iberostar is party to 19 hotel administration contracts, including four hotel joint ventures, in which it is a 50% owner, notes Miguel Alejandro

© Havana Times