Chicago, Illinois-based Hyatt Hotels Corporation (2016 revenues exceeded US$4 billion), has not identified a property management opportunity in the Republic of Cuba, despite efforts to do so.
The government of the Republic of Cuba is seeking to have companies with management contracts also become sources of financing for the managed property, a change in status that global hotel management companies are resisting. In most management contracts outside of the Republic of Cuba, the hotel management company receives the daily revenues of the property and directly makes payment for expenses (employees, food, utilities, etc., and, importantly, retains funds for maintenance). In the Republic of Cuba, the Republic of Cuba government-owner of the property directly collects all revenues and then determines what is necessary for the property manager. Thus, maintenance is often neglected and the property owner may use Republic of Cuba-sourced products (construction materials, furniture, linens, sundries, amenities, and consumables) even if inferior to imported products; and thus place the global reputation of the property manager at risk and provide the guest with an inconsistent experience.
There is frustration by global hotel management companies with the increasing distance between what the property is charging for a room, especially in the city of Havana, and what the Republic of Cuba nationals who work at the property are receiving as wages. This distance is negatively impacting the guest experience.
Members of the Chicago, Illinois-based Pritzker family have substantive shareholdings in Hyatt Hotels Corporation.
Members of the Pritzker family also have substantive shareholdings in Royal Caribbean Cruises, Ltd.; at one reporting they were the third-largest shareholder in the company, which operates sailings to the Republic of Cuba. LINK TO POST: http://www.cubatrade.org/blog/2017/1/26/cuba-is-trivial-part-of-business-says-royal-caribbean-cruises-chairman-ceo-not-quite-accurate?rq=pritzker
The Honorable Penny Pritzker (net worth reported as US$2.4 billion) served as United States Secretary of Commerce during the Obama Administration from 26 June 2013 to 20 January 2017 and visited the Republic of Cuba twice during her tenure.