MIAMI, United States. – The extensive construction of hotels in Cuba continues to generate controversy among analysts and everyday Cubans. This time, it was economist Pedro Monreal who questioned the relevance of continuing to build hotel facilities for tourists. 453u5j
In a recent Tweet, the expert called attention to the investment in hotel infrastructure when the island has a low occupancy rate.
“Median hotel occupancy in Cuba was 27.9% in the First Quarter 2023. Seven out of ten hotel rooms are not used, but resources are still being channeled to the construction of hotels. Can someone explain to me the rationale?” asked Monreal.
This economist indicated that in some places hotels are used as a money-laundering mechanism, which is the reason why it’s not dismissed that Cuba could be one such place.
“Traditionally, there have been cases where hotels have been used in the Caribbean as instruments of “fiscal optimization”, associated mostly with tax avoidance (which is legal) and not so much with tax evasion (which is illegal). This process –states Monreal- consists of ing manipulation through an internal price-transfer scheme. Transnational corporations under-report profits in countries where the tax rate is high (Europe) and they transfer those profits to countries with low or cero tax rates (the Caribbean). In order to do that, you would need hotels.”
In recent years, the increase of hotel investments in detriment of rescuing and developing sectors like Public Health and Education has been extremely criticized by Cubans inside and outside the island. The regime has tried to justify this move with the need to access hard currency. However, and in spite of an excessive investment in hotels, tourism in the Caribbean island is not recovering.
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