A tourism professional estimates that Meliá, Iberostar and others will prove “indispensable for managing the sectoral transition”
14ymedio, Madrid, June 29, 2026 / At 81 years of age, Ignacio Vasallo is one of the foremost authorities on tourism in Spain. Not only does he have an in-depth knowledge of the private sector – he has served on the boards of countless companies in the industry – he has also held numerous public positions, founded Turespaña in the late 1980s, and was the first director of the World Tourism Organization. For this reason, the analysis of the future of the tourism sector in Cuba that El Economista publishes today cannot be overlooked.
The expert does not confine himself to offering his views on what has happened and what lies ahead for the island – he also provides figures that were not previously known. The most significant is his estimate that Spanish hotel companies have lost between 80 and 100 million euros in Cuba as a result of the impossibility of repatriating hard currency, a measure imposed last year that generated enormous frustration among foreign companies. The funds, trapped in the banking system, are considered lost “in the balance sheets of the Spanish parent companies. For them, Cuba has ceased to be a strategic priority,” Vasallo concludes, noting that interest has shifted to the Riviera Maya, Cancun and Punta Cana, currently the undisputed leaders in the Caribbean.
However, the Spanish hotel companies are not going to leave Cuba either, he says categorically, as better times will come. “They have accumulated a body of operational knowledge and institutional relationships that North American corporations – which will want to establish themselves there – simply do not have. When the system changes, no authority or investor will do without the Spanish hotel chains, which will prove indispensable for managing the sectoral transition, replicating the process already seen following the fall of the Soviet bloc in Eastern European countries,” he adds.
“They have accumulated a body of operational knowledge and institutional relationships that North American corporations – which will want to establish themselves there – simply do not have”
Vasallo was there at the beginning. His article opens with that memory: in 1990 he was present for the opening of Meliá’s first hotel in Cuba, the Sol Palmeras. He had traveled to Cuba two years earlier and there he enlightened a Fidel Castro who was resistant to tourism, explaining what the sector had meant for Spain’s economic development in the 1960s and how it had helped open the country up. “Castro was reluctant, but the economic situation was forcing him to take measures he would not have taken under normal circumstances,” he recalls.
He also had dealings with Gabriel Escarrer Julia – predecessor and father of the current CEO of Meliá – who had reached an agreement with Cubanacán to bring the Sol chain to the island. The businessman calculated that he would recoup his investment in just two years and believed the risk was offset by extremely high returns. Vasallo gave him a favorable opinion, and the relationship began, paving the way for other Spanish companies. “The cumulative direct investment by these corporations stood at around 160 million euros, a third of the total invested by Spanish companies. During the first two decades, the return on these investments was extraordinary. The profits earned and repatriated far exceeded the initial capital outlay,” he explains.
The expert explains how that partnership worked – the arrangement under which around a hundred hotels were built: the Spanish side held a 49% stake in the joint venture, which became the owner of what was built for an agreed period of between 25 and 50 years. Once that period expired, ownership reverted to the State. “Under this model, the companies contributed the capital for investment in fixed assets, renovations and furnishings, taking on the operational management of the business,” while the land remained in the hands of the Cuban State.
Then came the military conglomerate GAESA which, he explains, had by that point accumulated “sufficient capital to begin building new hotels on its own account.” Gaviota was then created, with which the companies agreed a remuneration structure based on two components: “a fixed percentage for hotel management and a variable incentive linked to profits.”
Gaviota was then created, with which the companies agreed a remuneration structure based on two components: “a fixed percentage for hotel management and a variable incentive linked to profits”
The management-only model and the original joint-venture model coexisted and flourished for years, until the onset of Cuba’s economic difficulties, which were aggravated by the pandemic. After that came the current major crisis, with the accumulation of sanctions – some specifically targeting GAESA – that have forced the current withdrawal of the foreign hotel chains associated with Gaviota. In the specific case of Meliá, following the abandonment of the management of 14 hotels, it is left with just 19. Iberostar, also Spanish, relinquished 6 of 12, and other companies have reduced or eliminated their presence on the island entirely.
Vasallo is unequivocal. The overall balance has been positive, and now all that remains is to wait and see what happens. “The Cuban market has completed its cycle. Today it represents a latent asset managed under damage-limitation criteria, pending the inevitable bright tourism future of Cuba – which appears closer following the reforms set in motion by the regime, including the dismantling of GAESA and its replacement by public limited companies, planned devaluations of the peso, and the authorization of private banks, all of which amounts to a complete overhaul of the economic system.”
Translated by GH
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