14ymedio, Juan Diego Rodriguez / Olea Gallardo, Havana, 11 May 2022 — Though an explosion at the luxurious Saratoga Hotel last Friday led to the deaths of at least forty-three people and the destruction of an iconic Havana landmark, the seeds of its demise were planted within its walls much earlier.
Specifically, this was in 2016, when the Armed Forces Ministry seized the property from Habaguanex — a company had been operating under the auspices of the then all-powerful Office of the Historian of Havana, directed by Eusebio Leal — and handed over to the Gaviota group.
Leal’s agency had been successfully operating a number of tourist-related commercial properties when they were taken over by the Revolutionary Armed Forces Business Administration Group (Gaesa), led by Raul Castro’s former son-in-law, General Luis Alberto Rodriguez Lopez-Calleja.
“The Gaviota people were driving the Saratoga into the ground,” claims one former employee, a man in his forties who prefers to remain anonymous. He quit working there two years ago and swears he will never go back. “Everything became run down and they weren’t taking care of anything,” he reports.
This was a far cry from 2005, when the Saratoga — built in 1880 and operated as a hotel at the corner of Prado and Dragones since 1933 — reopened as modern five-star establishment after a long period of decline that began with the triumph of the Cuban revolution. The restoration was carried out the Office of the Historian and financed by foreign investors.
One of those investors, who prefers to remain anonymous, tells 14ymedio that the tab for refurbishing the Saratoga — part of an ambitious plan by Leal to restore Havana’s historic city center — was on the order of fifteen million dollars.
“An English developer sought out investors in several European countries, including Spain,” he explains. That developer was Coral Capital, a company founded by Amado Fakhre, an Anglo-Argentinian with roots in Lebanon. “We liked this project because we always believed, and still believe, in the future of Cuba,” says the investor. “And we never thought the current governent would last this long.”
According to this investor, however, everything changed once the property was transferred to Gaviota. “It all went downhill from there,” he says, though he acknowledges that investors also realized that the developers, led by Fakhre, did not have much experience in the hotel business. “They tried to make agreements with international [hotel] chains but were not successful. And, on the whole, the way they handled the negotiation with Gaviota was disastrous.”
The relationship of Fakhre and Stephen Purvis, his partner at Coral Capital, with the Cuban military brings to mind the popular fable about the frog who agrees to transport a snake across a river only to be stung by the scorpion in mid-stream, dooming them both. The two men were arrested — first in 2011 and again in 2012 — and accused of bribery. They remained in detention until their trial in 2013, when they were found guilty of “misdemeanor corruption” and released.
However, some media outlets report that Fakhre was forced to sign a confession stating that he had been detained for “having revealed state secrets” and spent twenty months being interrogated by the political police in a government safe house.
According to a 2016 article published in Vice, his business had invested a total of tweny-eight million dollars in the Saratoga.
Eusebio Leal’s star shone brightly even when Fidel was still in power and it did not dim until a long time thereafter. A flattering 2009 article in the official press noted that Habaguanex, which was created in 1994, operated no fewer than 300 tourist facilities. These included restaurants, shops, markets, cafes and lodgings with a total capacity of 546 rooms. These operations were touted as examples of “sustainable” development, whose profits went to “both the rescue of buildings that make up the Historic Center and to various social programs.”
“One morning, the elderly were invited to an extravagant breakfast at Casas Museos as part of a cultural event. And this was no run-of-the mill event,” reports a dancer who who worked with the Office of Humanitarian Affairs, which was also affiliated with the Office of the Historian
“Everything was carefully worked out,” she explains. “Partnership agreements and donations from from overseas as well as the income that Habaguanex generated as a company from all its hard-currency stores and hotels.”
“Not just anyone worked for them,” says the artist, who defends the management skills of Eusebio Leal, who died of cancer on July 31, 2021. “The Office of the Historian was a country within a country. They were powerful but they did things well. I worked there for many years and I know the efforts that were made.”
“In the end, they were audited and everything was taken away from them,” she says, alluding to the moment the Armed Forces took control of Habaguanex’s most attractive assets.
Once its foreign investors pulled out, the Hotel Saratogo languished under Gaviota’s management. Other former employees report deteriorating working conditions and the loss of financial incentives that the hotel’s foreign managers often provided on an informal basis to their workers in addition to their salaries.
“The first thing to go at the Saratoga was the art. But before that was the class,” says another former employee. “When it was part foreign-owned and part Habanguanex-owned, the Anacaona restaurant on the ground floor was packed on Christmas Eve. But under Gaviota, it wasn’t even a shadow of its former self.”
Gaviota — proprietor of the luxurious Grand Hotel Manzana and manager of the Kempinski — has close to sixty hotels and villas throughout the island with close to 30,000 bedrooms, most of which are administered by foreign companies.
It is the operations under foreign management that enjoy the best reputations while the hotels over which the military conglomerate has exclusive control have not managed to achieve the same level of customer satisfaction.
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