US Brands Rush In as Obama Normalizes Relations With Cuba

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Havana Cuba Airport

The political and economic plates are shifting as Cuba/US relations open for the first time since the early 1960s, when the US broke off diplomatic relations and imposed a trade embargo after the Cuban revolution led to communism.

The embargo was estimated to cost the US economy $1.2 billion a year, reports the BBC—not counting the human misery the split engendered.

That era came crashing down as President Barack Obama reopened a US embassy in Havana in August 2015, a month after Cuba reopened its embassy in Washington.

This week’s historic visit by President Obama to Cuba—the first such Presidential trip since Calvin Coolidge in 1928—signals the opening of the doors. And US businesses and tourists are set to stream in—digital wallets and checkbooks in hand.

Starwood has struck the historic first US deal with Cuban authorities since the revolution of 1959. The chain will renovate and run three hotels in Havana—”a multimillion-dollar investment to bring the hotels up to our standards,” according to a spokesperson.

Starwood Cuba

While Starwood will brand two Cuban hotels, ownership remains with state-run companies, one of which is run directly by the military, reports The New York Times.

Marriott announced its intention to begin doing business in Cuba. President and CEO Arne Sorenson, a proponent of opening trade relations, is traveling with US Commerce Secretary Penny Pritzker during President Obama’s visit to Cuba.

“We are gratified to receive permission from the US government to pursue business opportunities in Cuba,” said Sorenson, in Skift. “We have long been convinced that with the right frameworks in place, new economic opportunities, including dramatically expanded travel, abound in Cuba. These could deliver real benefits to the Cuban people and also have the effect of bringing both Americans and Cubans closer together.”

US regulations don’t yet allow visits to Cuba solely for tourism, but airlines and Airbnb are tilling the soil nonetheless. Airbnb has added 4,000 listings since it launched last year in Cuba, only available to US travelers to date but opening up worldwide on April 2.

Airbnb received a special exception, reports AP, allowing Cuban hosts to rent to anyone, and Airbnb’s co-founder and CEO Brian Chesky traveled to Cuba this weekend to meet with Airbnb hosts and attend White House-related events.

“What is left to be seen is how Airbnb and American-owned hotels will impact Cuba’s robust network for casas particulares—private family homes opened up to tourists for short-term stays,” reports Quartz. “Similar to bed-and-breakfasts, they are currently the go-to option for tourists, and have been a way for locals to pocket some extra income since the Cuban government allowed them in 1997.”

The majority of hotels in Cuba are government-owned while hotels from foreign companies are operated by brands from Latin America and Europe that include Melia Hotels International, Riu Hotels & Resorts, Iberostar Hotels & Resorts, and Barcelo Hotels & Resorts.

“Right now, there are an estimated 61,000 hotel rooms available in Cuba, 65 percent of which are considered four- and five-star, according to numbers released by the Cuban Ministry of Tourism,” notes Skift.

Also entering the rush to Cuba is Priceline’s Booking.com, the first online US travel brand booking travel to Cuba.

Bookings.com Havana Cuba

And Google will be one of the first American companies to help open up Cuba to the internet, President Obama announced, as reported by Reuters. “One of the things that we’ll be announcing here is that Google has a deal to start setting up more Wi-Fi and broadband access on the island,” the president told ABC News. While content restrictions remain, Google will provide the infrastructure for Cubans to get online en masse for less money.

Carnival Corporation, the world’s largest leisure travel company, also announced Monday that the Cuban government has granted approval for the company to begin travel to Cuba starting on May 1st.

Following U.S. authorization granted in July 2015, Carnival Corporation is now cleared to operate the 704-passenger MV Adonia to Cuba through its new social impact brand Fathom. This marks the first time in over 50 years a cruise ship is approved to sail from the United States to Cuba in yet another first for this historic week.

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