{"id":327563,"date":"2025-08-26T19:47:53","date_gmt":"2025-08-26T23:47:53","guid":{"rendered":"https:\/\/oncubanews.com\/en\/?p=327563"},"modified":"2025-08-26T19:47:53","modified_gmt":"2025-08-26T23:47:53","slug":"tourism-and-hotel-leasing-in-cuba-a-valid-option","status":"publish","type":"post","link":"https:\/\/oncubanews.com\/en\/opinion\/columns\/alternatives\/tourism-and-hotel-leasing-in-cuba-a-valid-option\/","title":{"rendered":"Tourism and hotel leasing in Cuba. A valid option?"},"content":{"rendered":"

During the sessions of the National Assembly of People\u2019s Power, held in July 2025, Cuban Prime Minister Manuel Marrero announced that <\/span>the government is considering leasing hotel facilities<\/b><\/a>. This would be used as one of the avenues for foreign investment in tourism and one of the options to reverse the current critical situation in the sector.<\/span><\/p>\n

Some ask whether the idea seems right or not. The answer is not simple, firstly because the success of the measure depends on many factors, and secondly, because little is known about the strategies used to implement this idea. However, we can try to delve a little deeper into the analysis of this option to attract foreign partners.<\/span><\/p>\n

Leasing is defined as a contract by which one party, in exchange for a price, grants the other the temporary use of something. The agreement can be long-term.<\/span><\/p>\n

If a person decides to lease a car or other consumer good for personal use, the analysis is one way. But if someone decides to lease an asset to operate it and earn a profit from the business, the analysis is different.<\/span><\/p>\n

The lessee must calculate the lease price as a fixed cost and expect that the revenue to be obtained from the business exceeds all costs, including the lease, which represents a significant portion of the total costs.<\/span><\/p>\n

In this case, when trying to negotiate a low price to lease a hotel, the lessee will try to demonstrate that they do not expect hotel occupancy in Cuba to increase significantly compared to today, given the decline in tourism.<\/span><\/p>\n

And this is not only due to the fact that hotels may have food and beverage supply problems, or lack of maintenance, but also due to the country\u2019s overall situation regarding the lack of electricity, public transportation, fuel shortages for rental cars, the state of the non-hotel network and the external pressures of the blockade against Cuba, etc., aspects over which the lessee cannot influence.<\/span><\/p>\n

Meanwhile, the lessor \u2014 in this case, the Cuban state \u2014 may consider that a fixed lease price can guarantee a stable minimum income, even if tourism in the country continues to decline, or that this fixed income could even be higher than the net profit that would be obtained if the hotel remained in the hands of the current management.<\/span><\/p>\n

However, this lease price may also fall below the income to be obtained if hotel management and the resulting influx of tourists were to improve, regardless of the general state of the country. These variables are subject to the multiple factors already discussed.<\/span><\/p>\n

There is another, no less important aspect in any business management: human resources. It is often said that human capital is a company\u2019s main asset, but in the country, little action is taken to follow this oft-repeated and undervalued phrase.<\/span><\/p>\n

Many tourists\u2019 opinions highlight that the quality of service in Cuban hotels is far inferior to that they receive in similar hotels in Canc\u00fan or the Dominican Republic. And this is not just a problem of labor exodus to other countries and a lack of staff. Cuban administrators cannot decide on the wages to be paid to employees, leaving this aspect to state employers.<\/span><\/p>\n

When employer entities were created, the idea was defended that this was to guarantee a minimum income for workers, their labor rights and to ensure that they would not be exploited by foreign capitalists.<\/span><\/p>\n

In practice, employer entities have instead set a maximum income for workers, defended the theory that a sector\u2019s income cannot be much higher than that of the rest of the country, so as not to create social disparities, or continued the practice inherited from the Soviet Union, whereby wages and incomes are set by a central ministry according to occupational categories.<\/span><\/p>\n

Additionally, this concept maintains that foreign currency payments for employment go to the state and not to the workers, not allowing foreigners to encourage workers at the facilities they manage.\u00a0<\/span><\/p>\n

In this way, this archaic concept, even mentioned and defended on a recent TV program called <\/span>Cuadrando la Caja<\/span><\/i>, continues to be dragged along as if it were a principle of Marxist theory. It results not only in labor exodus, but also in a lack of commitment among many workers. They seek their income not by standing out as good workers and improving their wages, but by the diversion of resources (food and beverages that should be allocated to tourists), a lack of initiatives to improve service, etc. Not all of them, but many.<\/span><\/p>\n

If this doesn\u2019t change at its roots, when the well-being of workers depends more on tips and unconventional income (diversions), the future lessee will be able to do little to improve this situation.<\/span><\/p>\n

It is also unknown whether the lessee will be authorized to have an import license in a state-owned hotel, to manage the financial resources of the hotel they lease, to decide when to make repairs and replace furniture and other aspects related to the management of the facility they lease, so that it is in optimal condition and does not lose competitiveness.<\/span><\/p>\n

Let\u2019s assume that the lessee is allowed to decide on all these issues, both asset management and human resources. Ultimately, breaking a major taboo, the GAE was authorized to allow its hotel developer to employ Indian labor to ensure quality construction finishes. These Indian workers certainly did not receive the same wages as Cuban state employers would pay, based on the occupational category of similar Cuban workers.<\/span><\/p>\n

Let\u2019s assume that all these changes bring positive results, with improved hotel occupancy. But this will not impact the revenues of the state, as the owner of the hotels.<\/span><\/p>\n

The revenues of aviation, car rental companies, and non-hotel service providers, to name a few, may improve, but the hotel owner will only receive the leasing income.<\/span><\/p>\n

And so, the question that arises is quite simple or less complicated: if hotel revenues are improving, or are expected to improve, because lessees are being offered management privileges not previously granted to others, why aren\u2019t these same privileges being offered to the current managers of state-owned hotels or of joint ventures?<\/span><\/p>\n

Why can\u2019t these Meli\u00e1, Barcel\u00f3, Iberostar, Blue Diamond and other foreign managers manage the hotels as real managers, or as they do in the Dominican Republic, and be held accountable for their management?<\/span><\/p>\n

Why should these foreign managers be paid a significant amount of resources (fixed management income and a percentage of profits obtained) if the hotels they manage receive an immense amount of criticism from the majority of tourists who visit them?<\/span><\/p>\n

It\u2019s true that these chains provide an internationally prestigious brand, which in theory attracts tourists who are familiar with them, but that was only valid at the beginning; today, social media and reviews from previous visitors can be much more significant in making purchasing decisions among potential tourists than the brand names that accompany those hotels.<\/span><\/p>\n

Nor can we demand much from these foreign partners, because they can always defend themselves by claiming they have no authority to decide on any aspect of hotel management.<\/span><\/p>\n

Unless negotiators from the Ministry of Tourism and Gaviota obtain very favorable lease prices, this measure sounds somewhat desperate, given that no other alternative solutions have been explored beforehand.<\/span><\/p>\n

Sadly, this is reminiscent of the decision years ago to close sugar mills, arguing that sugar prices on the international market had been very low for years and the harvests were generating more losses than profits.<\/span><\/p>\n

The century-old Cuban sugar industry was dismantled instead of experimenting with other intermediate options, such as joint ventures; or companies with entirely foreign capital; or the leasing that is now being sought; or mills dedicated to the production of alcohol and its derivatives; or allowing the sector to process its accounting, costs and income only in foreign currency (instead of in the national currency, with a USD\/CUP exchange rate of 1:1, which is destructive to export sectors); or better stimulating the agricultural workers who plant, tend and harvest the sugarcane.<\/span><\/p>\n

With many reservations and always waiting for reality, a priori this seems to me more like the classic saying that we either don\u2019t make it or we go too far, always lurching and lurching.<\/span><\/p>\n

This is no longer the time to continue improvising. We keep repeating that tourism is the engine of the Cuban economy, but for now it doesn\u2019t have many wagons to pull. We must consider that tourism is usually a sector that inserts itself and spills resources into the rest of the economy; and in the case of the Cuban economy, it has run out of oxygen.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Some ask whether the idea seems right or not. The answer is not simple: it depends on many factors and the details of its implementation are unknown.<\/p>\n","protected":false},"author":1880,"featured_media":327565,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[34783],"tags":[19256,14916],"ppma_author":[33641],"class_list":["post-327563","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-alternatives","tag-featured","tag-tourism-in-cuba"],"acf":[],"yoast_head":"\nTourism and hotel leasing in Cuba. A valid option? | OnCubaNews English<\/title>\n<meta name=\"description\" content=\"Some ask whether the idea seems right or not. 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A valid option?"}]},{"@type":"WebSite","@id":"https:\/\/oncubanews.com\/en\/#website","url":"https:\/\/oncubanews.com\/en\/","name":"OnCubaNews English","description":"Revista sobre Cuba","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/oncubanews.com\/en\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/oncubanews.com\/en\/#\/schema\/person\/56f87f5081363e861e9fe1e1f794e698","name":"Omar Everleny","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/oncubanews.com\/wp-content\/uploads\/2023\/03\/everleny-2a-96x96.jpgbda55ccd4111309105565ee7ce151628","url":"https:\/\/oncubanews.com\/wp-content\/uploads\/2023\/03\/everleny-2a-96x96.jpg","contentUrl":"https:\/\/oncubanews.com\/wp-content\/uploads\/2023\/03\/everleny-2a-96x96.jpg","caption":"Omar Everleny"},"description":"Recibi\u00f3 el doctorado de Econom\u00eda de la Universidad de La Habana y la maestr\u00eda en Econom\u00eda y Pol\u00edtica Internacional en el Centro de Investigaci\u00f3n y Docencia Econ\u00f3micas (CIDE), M\u00e9xico DF. Sus publicaciones recientes, incluyen, entre otras The Cuban Economy in a New Era: An Agenda for Change toward Durable Development, con Jorge I. Dom\u00ednguez y Lorena Barberia, Harvard University Press, 2017; \u201cLa econom\u00eda cubana: evoluci\u00f3n y perspectivas \u201d, Estudios Cubanos, no. 44, University of Pittsburgh Press, 2016; \u201cForeign Direct Investment in Cuba: A Necessity and a Challenge\u201d, A New Chapter in US-Cuba Relations, editado por Eric Hershberg y William M. Leogrande, Palgrave Macmillan, 2016; Miradas a la econom\u00eda cubana: un an\u00e1lisis desde el sector no estatal, Editorial Caminos, La Habana, 2015.","url":"https:\/\/oncubanews.com\/en\/author\/omare\/"}]}},"authors":[{"term_id":33641,"user_id":1880,"is_guest":0,"slug":"omare","display_name":"Omar Everleny","avatar_url":"https:\/\/oncubanews.com\/wp-content\/uploads\/2023\/03\/everleny-2a-96x96.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/oncubanews.com\/en\/wp-json\/wp\/v2\/posts\/327563","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/oncubanews.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/oncubanews.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/oncubanews.com\/en\/wp-json\/wp\/v2\/users\/1880"}],"replies":[{"embeddable":true,"href":"https:\/\/oncubanews.com\/en\/wp-json\/wp\/v2\/comments?post=327563"}],"version-history":[{"count":2,"href":"https:\/\/oncubanews.com\/en\/wp-json\/wp\/v2\/posts\/327563\/revisions"}],"predecessor-version":[{"id":327566,"href":"https:\/\/oncubanews.com\/en\/wp-json\/wp\/v2\/posts\/327563\/revisions\/327566"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/oncubanews.com\/en\/wp-json\/wp\/v2\/media\/327565"}],"wp:attachment":[{"href":"https:\/\/oncubanews.com\/en\/wp-json\/wp\/v2\/media?parent=327563"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/oncubanews.com\/en\/wp-json\/wp\/v2\/categories?post=327563"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/oncubanews.com\/en\/wp-json\/wp\/v2\/tags?post=327563"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/oncubanews.com\/en\/wp-json\/wp\/v2\/ppma_author?post=327563"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}