Spanish Hotel Chain Meliá Reduces Operations in Cuba Amid U.S. Sanctions

Spanish hotel chain Meliá is scaling back its presence in Cuba after the U.S. imposed new sanctions. According to state website Cubadebate, Meliá will stop managing 15 of the 34 hotels it operates on the island. This reduction hits Cuba’s tourism sector hard, which has been declining since peaking in 2018.

The decision, reported on Wednesday, stems from “a sense of corporate responsibility and external factors that have affected the operation, legality, and security” of the hotels. The announcement followed U.S. President Donald Trump’s executive order on May 26, increasing sanctions against Cuba.

The U.S. targeted Grupo de Administración Empresarial S.A. (GAESA), a conglomerate run by the Cuban Revolutionary Armed Forces. The executive order freezes foreign companies’ assets and seizes accounts in the U.S., impacting their operations.

GAESA, formed in the 1990s, manages various businesses, including car rentals and retail stores. Gaviota, a subsidiary of GAESA, partners with Meliá for hotel management. Meliá’s partial withdrawal affects its 14,000-room operation in Cuba.

Research associate Lee Schlenker from the Quincy Institute for Responsible Statecraft, highlights that Spanish and Canadian firms are key investors in Cuba’s hotel industry. He notes that the lack of tourists and fuel shortages have caused these companies to reconsider their operations.

“There are thousands of Cubans who work in these hotels,” Schlenker says, emphasizing the implications for local employees.

Several Meliá hotels, located in popular destinations like Varadero and Cayo Santa María, had already closed due to energy shortages and low demand, according to Cubadebate. The Cuban government blames U.S. sanctions for these challenges, leading to blackouts, water shortages, and supply issues.

Tourism worker Erich López expressed concern, stating, “It’s going to affect us, our families, and everyone involved in tourism. Our pay and income depend on this.” Parking attendant Carlos Luis Carbonel echoed, “This is terrible for everyone: for tour guides, for parking attendants, for hotel workers, for everyone.”

Other hotel chains, like Royalton and Iberostar, have also curtailed operations recently. Tourism statistics show a decline, with only 298,000 tourists visiting in the first quarter of this year, a drop from 573,300 in the same period last year.

Additionally, the Royalton Paseo del Prado hotel in Old Havana removed its sign on Wednesday, and Iberostar Selection remains closed. Airlines such as World2Fly, Air France, and Iberia have canceled flights to Cuba.

The Central Bank of Cuba announced the suspension of Visa and MasterCard operations after foreign entities cut ties with FINCIMEX S.A., a GAESA-affiliated agency. In a related development, Canadian company Sherritt International Corp. agreed to sell its stake in a Cuban mining venture.

Trump’s administration has intensified pressure for political change in Cuba, threatening tariffs on countries supplying oil to Cuba. This move compounded a crisis stemming from longstanding U.S. sanctions.

While U.S. and Cuban officials held talks earlier this year, tensions have heightened. Former Cuban President Raúl Castro was recently indicted in the U.S. for alleged involvement in downing civilian aircraft in 1996.