Starwood Hotels and Resorts has announced that it has signed three hotel deals in Cuba, the first time a US hotel company has done so in almost 60 years. Starwood beat out several other US hospitality companies that have been trying to invest in hotels in Cuba, including Marriott International. Marriott CEO Arne Sorenson is accompanying President Barack Obama on his historic trip to the CommunistÊisland nation Sunday.
Starwood received authorization from the US Treasury Department to operate existing hotels in Cuba. The Hotel Inglaterra in Havana will join Starwood’s Luxury Collection brand. The Hotel Quinta Avenida, also in Havana, will become a Four Points by Sheraton. Both hotels will undergo renovations before becoming Starwood properties later this year.
The company also has signed a letter of intent to convert the Hotel Santa Isabel in Havana into a Luxury Collection property.
ÒWe have an amazing and compelling number of brands. We are very strong in Latin America,ÓÊsaid Jorge Giannattasio, Starwood’s Senior Vice President and Chief of Latin America Operations, said in a phone call to USA TODAY from Havana. ÒWe know how to do business in the area. When no one thought it was possible, we made the right argument and we got the license.Ó
Marriott has also received Treasury approval but has yet to announce any hotel deals.
Obama began normalizing relations with Cuba in December 2014. A US embassy in Cuba re-opened last August. And last month, the two nations signed an agreement to let US airlines operate dailyÊround-trip flights to Cuba. All major US airlines are now vying for the right to do so.
While US citizens still cannot travel to Cuba strictly for tourism, they can go there under 12 approved categories including religious and educational activities. Starwood is taking advantage of a geopolitical shift while also tryingÊto negotiate its own future as it considers competing suitors for a buyout.
On Friday, Starwood dropped a $12.2 billion bid from Marriott to take over the company in favor of a $13 billion all cash offer from a consortium of investors led by Chinese insurance company Anbang.
Starwood has given Marriott through March 28 to make a counter-offer. Marriott said on Friday that it was evaluating the Anbang offer and considering its options.
If it is completed, the Marriott-Starwood merger would turn the duo into the largest hotel company in the world. Sorenson, who is vice chair of Obama’s Export Council, would become the CEO of the combined companies. If Starwood terminates the merger agreement that has been in place since November, it will owe Marriott $400 million in cash. On Saturday, Starwood sent a message that it can still stand on its own.
ÒWith Cuba’s rich history, natural beauty and strong culture, there is no question the entire U.S. hospitality industry has watched Cuba with great interest, and we are thrilled to lead the charge and bring our sophisticated, high-end brands into the market at this inflection point,Ó said Starwood CEO Thomas Mangas in a written statement.
All Cuban hotels are state-owned. But MrÊGiannattasio says Starwood will have enough latitude to be able to convert the hotels to meet their standards of quality. In addition to renovating the properties, Starwood will trainÊthe staff.
ÒWe operate in many, many different countries and conditions,Ó said Mr Giannattasio. ÒOperating in 102 counties around the world clearly provides a lot of challenges.Ó But, he said, Òwe expect to have pretty much the same level of control we have in many other countries.Ó
Starwood has partnered with Hotel Inglaterra owner Gran Caribe to rebrand the property into a member of The Luxury Collection. The hotel opened in 1875 and has 83 rooms. The 186-room Hotel Quinta Avenida, located in the Miramar district of Havana, is owned by Grupo de Turismo Gaviota S.A. The Hotel Santa Isabel is owned by Habaguanex. Overlooking Havana Harbor, it has 27 rooms, including 11 suites.
From USA TODAY
