Cuba built New hotels despite economic crisis

Cuba built New hotels despite economic crisis

HAVANA, Aug. 19th In the cafeteria of the luxurious Grand Aston hotel in Havana –which opened in March–

there are more waitresses than guests to the extent that in the middle of a summer afternoon the employee joke: “There’s even time to think.”

From this imposing building, with 600 rooms, which can cost as much as $200 a night, The iconic boardwalk of the Cuban capital can be seen between a row of empty tables and a refrigerator with foreign beers.

There are hardly any guests. But not only here, but in a good number of hotels on the island, some of them built and opened in recent years coinciding with the serious crisis that the island has been facing since 2020.

“I realized (the lack of tourists) when I looked from my room to the street the next morning and there was no one. It is true that we found it strange”, confesses from the lobby of the Habana Libre hotel Valerie, a 20-year-old Frenchwoman along with her friend Shawnee, 19.

Cuba built New hotels despite economic crisis

Hotels are under construction and others are already open, in Havana (Cuba). Photo EFE

Although hotel occupancy in Varadero -the main sun and beach destination in Cuba- is higher than in Havana and the island is not in high season -coinciding with winter in the northern hemisphere- the figures used by experts reaffirm the perception of these two girls.

Tourists and rooms

The occupancy rate in accommodation in Cuba remained around 50% between 2016 and 2020according to official data collated by the economist Pedro Monreal.

The number of rooms, for its part, has risen by more than 25% since 2016. If at the beginning of that year there were 62,000 rooms, the Ministry of Tourism (Mintur) currently speaks of 78,862, of which 74% are 4 and 5 stars.

Cuba built New hotels despite economic crisis

The occupancy rate in accommodation in Cuba remained around 50% between 2016 and 2020. Photo EFE

Monreal adds that in the last biennium, while the gross domestic product (GDP) fell by more than 7%, the State disbursed about 1,500 million dollars in hotels.

The construction of new tourist rooms – which this economist estimate is the bulk of the “business services, real estate, and rental activities” item – Reached close to 50% of the investment between 2020 and 2021.

In the first three months of 2022, 20 times more was invested in this area than in public health (1.7%) or in education (1.2%), according to official figures.

The increase in the number of rooms contrasts with the ups and downs that the number of tourists has suffered mainly due to political vicissitudes and the pandemic.

The Ministry of Tourism (Mintur) currently speaks of 78,862, of which 74% are 4 and 5 stars. Photo EFE

In the first semester, Cuba received 682,297 international travelers, five times more than in the same period of the previous year, but still far from the more than 2 million who arrived in the first six months of 2019, before the outbreak of the coronavirus.

The country’s authorities expect the arrival of 2.5 million tourists by 2022, a figure that the experts consulted have questioned whether it can be achieved with the current trend.

Before the pandemic, in 2018 and 2019, Cuba came to attract between 4 and 5 million international travelers a year.

INCOMPREHENSION

These figures have caused misunderstanding among certain Cuban sectors, as the Government itself has recognized, something in part related to the current adverse economic context.

Cuba has been going through a serious crisis since 2020 as a result of the pandemic, the tightening of US sanctions and errors in national management.

The Cuban president, Miguel Díaz-Canel, acknowledged this year in the framework of a tourism fair that the country’s investment effort in this sector “it is not always understood by a part of the population” and emphasized the need to work on the “efficiency” of the sector.

The experts, for their part, do not share the Government’s diagnosis.

construction of new hotels “not justified”, assures Efe the Cuban economist Mauricio de Miranda. “At no time in recent times has there been an occupancy that really indicates that you need to increase the number of rooms,” he says.

Pavel Alejandro Vidal, associate professor at the Javeriana University of Cali (Colombia), agrees with this opinion, although he adds that tourism “has maintained acceptable levels of efficiency” and highlights that “It is the only sector in which a recovery can be underpinned” national.

State Bet

This commitment to increasing the hotel offer has its roots in a 2016 plan of the Ministry of Tourism (Mintur) that contemplates the construction of more than 100,000 rooms by 2030.

The document was woven at a time when the Cuban gaze was focused on the potential of the US market, the largest and wealthiest in the Caribbean region, as a result of the process of “thaw” with the United States during the mandate of Barack Obama ( 2009-2017).

Two years later, and with Obama’s roadmap squandered by his successor, the Republican Donald Trump, the Mintur drew up the 2018-2030 Development Plan with a view to the opening of 216 new hotels.

“We cannot wait for the blockade to end to build the hotel plant,” Díaz-Canel justified then, who trusted that the sector would become the “locomotive of the national economy”.

Efe contacted the Mintur to be able to include its position and arguments, but for the moment it has not received a response.

 

Tourist model

Experts not only criticize the money that the Cuban government spends on hotels but the model with which the country tries to position itself as a destination abroad.

“They lose the opportunity to create their own tourism product. They have opted for the massive sun and beach model which is already in decline in many countries,” criticizes the economist Elías Amor.

Amor also disapproves that the budget is hoarded in accommodation and not on “roads or other types of infrastructure” that also make up the traveler’s experience: “In the end, the tourist leaves the resort and what he finds is a country with many shortcomings,” he says.

For Vidal, the way in which hotel investment is decided in Cuba is also linked to the weight of the Business Administration Group (Gaesa), an opaque multisectoral conglomerate in the hands of the Revolutionary Armed Forces (FAR) with more than fifty companies, including the main ones in the tourism sector.

It is a factor that has managed a cash flow independent of the rest of the economy. They have facilities that other ministries and industries do not have, says Vidal.

Gaesa, which is not accountable to the Mintur or to parliament and does not disclose its accounts either, controls a good part of the hotels and income from the sector.

Its economic influence in Cuba is enormous: some experts consider that controls more than 50% of GDP.

EFE Source