Luxury hotels begin opening in Cuba as tourism fires up

The gathering spot, in the centre of town, is surrounded by horse-drawn carriages and long lines of colourful finned-and-chromed 1950s cars. But more utilitarian vehicles have recently begun circling the square: construction equipment transforming old buildings into luxury hotels.

As Cuba’s relationship with the United States grows warmer, real estate redevelopment is heating up, too.

“So many old buildings sat vacant for years with signs saying they were soon to be converted into hotels,” said Belmont Freeman, a Cuban-American architect based in New York. “Now I actually see cranes on construction sites. Cuban bureaucracy is easing up, and foreign hotel developers are finally finding ways to move these projects forward.”

A view from the rooftop terrace of the new Gran Hotel Manzana Kempinski La Habana, in the Parque Central neighbourhood of Havana. Photo: Lisette Poole/The New York Times

President Raul Castro’s loosening restrictions on private enterprise, improving relations with the US and financial necessity – Cuba’s gross domestic product shrank in 2016, for the first time in over 20 years, according to official figures – have fueled rapid change in many areas.

And several obstacles lie between the pent-up demand and a successful liftoff of Cuba’s luxury hotels. Utilities are not always reliable, poverty is widespread and visible, and even getting ingredients for restaurant-quality meals can be dicey.

But with Cuba suddenly an option for Americans exploring a culture kept off-limits for decades, the hospitality industry in particular has been supercharged. More than 4 million tourists visited in 2016, up 13 per cent from the previous year, according to the Cuban Ministry of Tourism. Among those visitors were more than 614,000 Americans, up 34 per cent from the year before.

The area around Parque Central has a front-row seat for the struggle, and the potential payoff.

Leading the wave of new luxury hotels is the 246-room Gran Hotel Manzana Kempinski La Habana, which stands in a restored European-style shopping arcade that stretches for a block. On the other side of Parque Central is the Hotel Inglaterra, which opened in 1875 and had Winston Churchill as one of its guests. Within shouting distance are several other luxury hotels managed by the French group Accor and Iberostar of Spain.

Alessandro Benedetti, a director of Kempinski’s sales and marketing department, in the Constante Bar inside the new Gran Hotel Manzana Kempinski La Habana. Photo: Lisette Poole/The New York Times

Although the Cuban government owns all hotels in the country, heavy hitters in the luxury hotel world will help manage many of them. The Manzana, which is scheduled to open in early June, is financed by the Cuban state company Almest Investments and co-managed by the Swiss luxury hotelier Kempinski and the Gaviota Group of Cuba. The Inglaterra will be managed by Marriott International and is set to open in December 2019.

Because US regulations on visiting Cuba have not been completely relaxed, the full deluge of American visitors has not yet arrived. Instead of declaring themselves tourists, they must come under the auspices of one of 12 categories like “educational activities,” which include interactions with Cuban people.

Former president Barack Obama’s visit to Cuba in 2016 paved the way for many of the changes in travel and hospitality. Priceline Group, a US company, received authorisation afterward to allow travelers to book rooms directly through its Booking.com website, and Starwood Hotels and Resorts became the first US hotel company to enter Cuba in nearly 60 years. Starwood received permission to operate three hotels, including the Inglaterra.

A view of the Capitolio from the rooftop terrace and pool of the new Gran Hotel Manzana Kempinski La Habana. Photo: Lisette Poole/The New York Times

Starwood’s first hotel in Cuba, a state hotel rebranded as Four Points by Sheraton Havana, opened in June 2016 in the Miramar district of Havana, popular with diplomats and business travelers, about 13 kilometres southwest of the Old Town. Last year Starwood was acquired by Marriott International, which will now manage the former Starwood hotels. Marriott had also been authorised to manage properties in Cuba.

But lengthy delays have tripped up many of the projects. Navigating shortages – Cuba imports 70 to 80 per cent of its food, according to the World Food Program – frequent electricity and internet outages, and a decrepit water and sewage system are just some of the headaches for hotels trying to maintain standards. And the area near Parque Central and much of Havana has been overtaken by poverty since the Cuban revolution in the 1950s, creating an uncomfortable juxtaposition between struggling locals and wealthy visitors.

“People are watching the Manzana closely,” said John Kavulich, president of the US-Cuba Trade and Economic Council. “There is a tremendous amount of pressure to maintain the Kempinski experience, and that will be difficult in Cuba.”

Like many buildings in Havana, the Gran Hotel Manzana – originally the Manzana de Gomez – has a storied past. Built between 1890 and 1918, the shopping arcade housed high-end clothing boutiques, two theatres, restaurants, a skating rink and a shooting range. After the revolution, some stores remained on the first floor, while the other floors were taken over by the government for offices and schools. But in recent years, the building – like many others in Cuba – fell into disrepair.

In 2012 the French construction company Bouygues Batiment International started renovations, and in 2014 Kempinski joined the project. Now the hotel has 5.4-metre ceilings, french windows and abundant art deco-style mirrors. The design plays up Havana’s history with elements like the turquoise-and-gold Constante Bar, named after the bartender who came up with the Hemingway Daiquiri.

Xavier Destribats, a senior executive with the hotelier Kempinski, on the rooftop terrace of their new hotel. Photo: Lisette Poole/The New York Times

From the Constante’s windows, guests can see El Floridita, one of Hemingway’s local watering holes (and where the drink was created). Rooms range in size from 40 to 150 square metres and will cost from $US370 ($503) to $US660 per night, according to Alessandro Benedetti, a director of Kempinski’s sales and marketing department.

Five storeys tall, the Manzana also has a rooftop terrace and swimming pool that offers views of the Great Theater of Havana Alicia Alonso, the National Museum’s Palace of Fine Arts and the Capitolio, a national government building that resembles the Capitol in Washington, though its architect is said to have modeled it on the Pantheon in Paris.

The top floor also has a fitness area and spa that cover more than 930 square metres. From the windows in the massage room, drying clothes can also be seen hanging from the broken windows of crumbling buildings nearby. This region of the city has been nicknamed “las sabanas blancas,” or “the white sheets,” for the laundry frequently seen fluttering in the breeze.

The building boom is also bringing into sharper relief the disparity between visitors and the average Cuban. Many Cubans work for the state and earn the equivalent of $US25 to $US30 a month. The ceiling on state employees’ salaries has been a challenge when hiring hospitality staff for these new luxury hotels in Havana.

While it remains to be seen how tightly it will control private enterprise, the Cuban government is betting that tourism will help solve its economic woes. In 2016 the government declared a goal of 10 million visitors by 2030.

The government is looking for new growth as the Cuban economy shrank 0.9 per cent in 2016, hurt by the oil crisis in Venezuela, a key trading partner.

The challenge will be avoiding the “Cancun-ification” of Cuba, said the architect and urban planner Miguel Coyula, referring to the resort area in Mexico that is a particularly popular destination for students on spring break.