Iberostar in Cuba Is Collecting White Elephants k1z18

HAVANA, Cuba. – At long last, Spanish hotel chain Iberostar was awarded the management of the K Tower, which will be the tallest hotel in Cuba, smack in the middle of 23rd Street. But in reality, this “accomplishment” is not a victory, inasmuch as it is known that the rest of the hotel chains that were interested in GAESA’s new toy until 2019 recently backed off when they saw that its finances were in the red, as opposed to other projects outside Cuba that were growing. 3v6m36

Tourism’s poor indicators in a vacation destination with little to offer except sun and beaches, a crisis that is endemic, fears of social uprisings that could endanger their interests as foreign investors, left the way open for an “investment” that could become the straw that breaks the camel’s back for Iberostar’s financial ruin in Cuba. Iberostar has its share of big headaches with an empty Grand Packard, the constant exodus of personnel, the poor skills of workers that remain, and in spite of the privilege of importing all supplies directly without intermediaries or import duties that the regime has granted the hotel chain to guarantee that it will not “pack-up and leave” the island?

Now, not even Iberostar staff knows what to think, because things are already looking ugly. Even though everything seems to be set-up for Iberstar’s success in Cuba, the fact is that things are going bad, according the company’s own personnel who have made comments “off the record”, and in spite of the regime convincing the hotel chain (for marketing reasons) to lend its brand to another project already bound for failure as was the case with the Gran Aston La Habana Hotel (managed by Grupo Archipiélago International).

What draws very strong attention is that Iberostar has taken on another gigantic urban hotel when it has never been able to fill the occupancy of the other white elephant located at Paseo del Prado. It is well known that the other great hotels that operate outside the sun-and-beach circuit, like the Habana Libre, the Nacional, the Manzana Kempinsky and the Grand Aston itself, with all the rest, have and will continue to have a very low occupancy rate not only during the present season but most likely for the next five or ten years if the communists remain in power or if they refuse to implement real political reforms, much more than just economic changes.

The urban-hotel formula does not work and will never work for Cuba, because there are many rental houses and smaller hotels, some of them presently under construction. Least of all while there is no quality and distinctive extra-hotel products to sell to visitors beyond the few conventions and events that only cover costs and serve a promotional purpose. We know how large is the share that Cuban organizers of these events pocket for themselves, and what little profit it represents for the State and for the hotels themselves, like the Grand Packard. These hotels have ended up as conference venues while their guest rooms, bars, restaurants, stores and swimming pools generate zero money as a result of zero guests or clients.

So, it begs the question: what other benefits, beyond duty-free importing and “friendship tokens”, is Iberostar getting in exchange for its risky decision? Is it about future guarantees, when “the future” becomes more uncertain every day and is no longer a bargaining chip?

In this hasty announcement, which contradicts previous statements about K Tower’s investment and management being 100% Cuban, one can detect an act of desperation (on the part of the once-arrogant GAESA) in addition to an imposition. When it comes to business –especially when it’s business with the Cuban regime- nothing happens out of comion or to honor friendships, but only out of convenience or coercion. And, if it’s not convenience, it’s coercion. I refuse to believe that Iberostar has taken to collecting white elephants.

Which means that, as of this moment, it’s not just Iberostar that knows why it accepted the insanity of managing the K Tower, why it decided to add a rare pachyderm to its leisure products inventory in Cuba. Iberostar knows, as do those that convinced the company to accept such a challenge. As for us, the outsiders, all we can do is keep on questioning and being aware of the buildings that are falling on our heads, and also the buildings -bound to remain empty- but that continue to rise over the ruins, even when the powers that be tell us that “there is no money” for construction.

ARTÍCULO DE OPINIÓN Las opiniones expresadas en este artículo son de exclusiva responsabilidad de quien las emite y no necesariamente representan la opinión de CubaNet.

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