Spanish hotel chain Meliá to shutter hotels in Cuba in latest blow to island's tourism sector

HAVANA (AP) — Spanish hotel chain Meliá has joined a growing list of companies with a long-standing presence in Cuba that are withdrawing or limiting their operations on the island after the U.S. announced new sanctions while upholding an oil embargo.

Meliá will cease operations at 15 of the 34 hotels it manages on the island, according to state website Cubadebate, dealing a blow to Cuba’s vital tourism sector, which has plummeted since its 2018 peak.

The report on Wednesday stated that Meliá’s decision was based on “a sense of corporate responsibility and external factors that have significantly affected the operation, legality and security of these establishments.”

The decision was announced May 26, just weeks after U.S. President Donald Trump signed an executive order expanding sanctions against the island. Most of the sanctions targeted Grupo de Administración Empresarial S.A., a business conglomerate operated by the Cuban Revolutionary Armed Forces, with the U.S. asserting it was a threat to its national security.

The executive order freezes the assets of foreign companies, seizes their accounts in the United States and prohibits travel by their shareholders, investors and employees— virtually eliminating their activity in the U.S. financial system.

GAESA, a Cuban conglomerate created in the 1990s, owns a wide range of businesses, from car rentals and retail stores to transportation companies. It is Meliá’s partner in hotel management through one of its subsidiaries, Gaviota.

Meliá deals new blow to Cuba's crumbling tourism sector

Meliá is one of Cuba’s most important partners in its vital tourism sector. Until its partial withdrawal, it operated some 14,000 rooms.

Spanish and Canadian firms are the biggest investors in Cuba’s hotel sector, noted Lee Schlenker, a research associate at the Quincy Institute’s Global South program, a Washington think tank.

“With the lack of international tourism, the fuel shortages, and just the broader decline since COVID…I’m sure that these companies will be rethinking their operations in Cuba with major implications for the people of Cuba, not just GAESA,” he said. “There are thousands of Cubans who work in these hotels.”

Several of the hotels that Meliá abandoned in idyllic destinations like the resorts of Varadero, Cayo Santa María and Jardines del Rey “were already closed and inactive due to energy problems and the drop in demand in Cuba,” according to Cubadebate.

Cuba’s government has blamed the U.S. energy blockade for prolonged blackouts, water shortages, supply problems, deficiencies in the healthcare system and disruptions in all aspects of daily life.