Stamford, Connecticut-based Starwood Hotels and Resorts Worldwide will receive authorization from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury to manage property(s) located in the Republic of Cuba.
Starwood Hotels and Resorts Worldwide is being acquired by Bethesda, Maryland-based Marriott International, which is also receiving authorization from the OFAC to manage property(s) located in the Republic of Cuba.
Will United States hospitality companies change the Republic of Cuba or will they be changed by the Republic of Cuba? Islands of state-of-the-art technology surrounded by seas of technology expectations
The most important question relating to the return of United States-owned hospitality companies to the Republic of Cuba marketplace is:
Will Marriott International and Starwood Hotels and Resorts Worldwide force changes to the hospitality throughout the Republic of Cuba or will the companies conform to the existing infrastructure (operations, economics, personnel, etc.)?
NOTE: the term “tourism” should not be used as the twelve categories of travelers permitted by the Trade Sanctions Reform and Export Enhancement Act of 2000 does not legally authorize leisure travel to the Republic of Cuba by individuals subject to United States law.
The initial answer will be a bit of both…
With the return of regularly-scheduled commercial airline service, the operational requirements of airlines are the foundation upon which the hospitality companies will operate.
There is a requirement for high-speed internet access (satellite or land-based, potentially leading to an upgrade of the cable that lies under the Florida Straits). The airlines and the hospitality companies will bring with them servers and modems and Wi-Fi equipment and computers and facsimile machines and printers and cable and satellite (Direct TV, Dish, etc.) and cellular equipment for 4G and 5G capabilities. As are the airlines, they will seek for the government of the Republic of Cuba to institute an electronic visa program. They will be islands of state-of-the-art technology surrounded by seas of technology expectations.
There is a requirement for correspondent banking (with Pompano Beach, Florida-based Stonegate Bank being the principal benefactor as the airlines and hospitality companies will make use of its direct correspondent banking agreement with Republic of Cuba government-operated Banco Popular de Ahorro).
Marriott International and Starwood Hotels and Resorts Worldwide will not permit their flagship properties to become ambassadors of what is a minimally-acceptable customer experience; envoys to the status-quo. They will be advocates for change; they will be forceful.
The United States companies will not permit properties to be absent of basic guest room necessities; nor will restaurant and bar menus not have available the products that are listed for purchase.
The United States companies will not permit properties to fall into disrepair because the Republic of Cuba government-operated company that owns the property is required to make payments to the government of the Republic of Cuba to be directed for other purposes.
The United States companies will not finance the operations of their properties because their landlord does not have the funds as required by the management contract.
The United States companies will have training programs- and they will bring individuals of Cuban descent from their United States properties to train and to work and to manage various departments of their respective properties. They will bring individuals of nationalities from throughout their global operations to impact the commercial, economic and political environment. They will increase the wages and benefits of their employees who are Republic of Cuba nationals. They will be employment magnets for the best and the brightest from existing properties throughout the Republic of Cuba. They will upend the existing employment structures.
Will the management contracts signed by Starwood Hotels and Resorts Worldwide and Marriott International be similar as those that Spain-based Melia and France-based Accor among others have signed with Republic of Cuba government-operated companies including Cubanacan Group, Gaviota Group, Gran Caribe, Hoteles Habaguanex? No, they will be adjusted towards the standards of the United States companies rather than the United States companies adjusting towards standards that will be operationally problematic.
The Libertad Act of 1996 authorizes individuals and companies subject to United States law to engage in direct negotiations with the government of the Republic of Cuba to settle claims registered with the Foreign Claims Settlement Commission under the auspice of the United States Department of Justice. As a result of a series of mergers and acquisitions during the last fifty-seven years, a US$51,128,927.00 claim initially made by New York-based International Telephone & Telegraph Corporation (ITT) is now controlled by Starwood Hotels and Resorts Worldwide (and, soon, Marriott International), which can use this value as a means to secure opportunities within the Republic of Cuba.
A cautionary note…. Since 17 December 2014, the government of the Republic of Cuba has continued to accept and to authorize primarily those Obama Administration initiatives that will earn revenues (visitors) rather than result in an expenditure of earnings (imports). United States agricultural commodity/food product exports to the Republic of Cuba decreased 41% in 2015 compared to 2014; and January 2016 exports to the Republic of Cuba decreased 8% compared to January 2015. Healthcare product exports increased fivefold in 2015 compared to 2014.