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Open For Business

SAHIC Cuba Brings Together U.S., Cuban Companies For Potential Partnerships

Wednesday, June 14, 2017
Dennis Nessler
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While diplomatic relationsbetween the U.S. and Cuba may have been restored in 2015 and the trade embargolifted effectively opening up the island nation for U.S. hotel development,there are still many hurdles left to clear before that comes to fruition.

As such, roughly 250developers, investors and management firms from the U.S., as well as more than20 other nations, attended the inaugural SAHIC Cuba conference last month atthe Melia Cohiba Hotel in Havana. Attendees were on hand looking to establish keypartnerships with Cuban companies that could ultimately net future hoteldevelopment.

Arturo Garcia Rosa,president and founder of SAHIC (South America Hotel & TourismConference)—which is poised to host its 10th anniversary edition of SAHIC SouthAmerica in September—noted of the attendees. “All of them are trying tounderstand who is who; what is happening; and where the opportunities will be,”he said.

Garcia Rosa further addedthe event “not only achieved the goal, but was so much ahead of it.” He notedthat many major U.S. brand companies—such as Marriott, Hilton, and Hyatt toname a few—were involved in the event, as well as the three primary Cuban hospitalitycompanies. “All of the major U.S. companies are talking with all thesecompanies trying to identify opportunities,” he said.

Garcia Rosa further pointedthat out in order for foreign companies to do business in Cuba they arerequired to have to a local partner as he touted the overall event. “We are soexcited because the idea is to put together people from all over the world withthe key decision makers from Cuba who will be their partners; to conductbusiness here, you need a Cuban partner. The Cuban executives are absolutelyopen to share the information and identify successful partners for our futureprojects,” he stated.

Thus far, the Four Pointsin Havana represents the only signed and completed deal with a U.S. hotelcompany. However, Garcia Rosa noted that several companies have been inconversations with the OFAC (Office of Foreign Assets Control) agency to obtainthe permits needed to move ahead with projects and they expressed confidencethey could be issued during 2017.

Nevertheless, Garcia Rosapointed out there are still plenty of challenges for foreign companies when itcomes to forging relationships. “They’ve got a lot of work to do. There are alot of opportunities, but because of the Cuban culture, and after more than 50years of this embargo, they need to build confidence and to build confidenceyou need time. Cubans need to have more than one approach with you. They needto trust in you that you will be a partner for long period of time,” he said.

Garcia Rosa also offeredthis advice to foreign companies, “you need to understand the rules.”

Meanwhile, he noted thatsome new rules have been put in place in Cuba, such as new immigration laws andthe ability to own second homes, for example. In addition, he noted that newinvestment rules have been put in place that are more in line with Europe andthe U.S., in terms of sending money and getting money back.

Garcia Rosa noted, ofcourse, that the new Trump administration in Washington could also play afactor in the pace of development for U.S. firms. “If nothing will change interms of the new rules approved by the Obama administration I think the processcould move faster. If not than perhaps it will take a little longer,” he said.

Meanwhile, during hiskeynote address, David Scowsill, president and CEO of the World Travel &Tourism Council, shared global and regional trends and outlooks for the hoteland tourism industry. He mentioned that “executives must stand up and lead theindustry, take responsibility with real commitment for change.”

Deborah Rivas, directorgeneral of foreign investment, ministry of commerce and foreign affairs ofCuba, shared the options for structuring a foreign investment in Cuba and theprocesses that must be carried out to obtain business permits and the requiredlicenses.

Cuban Hotel Executivesparticipating include Carlos Miguel Latuff Carmenate, President Grupo Gaviota;Eduardo J. Acosta de Arriba, President Hotelero Gran Caribe; Abelardo FernandezFalero, President Cubasol; Marisabel Gonzalez Hernandez, Commercial VP, GroupCubanacan; Raniel Leyva Medina, vp, business development, Grupo Gaviota; JoseManual Perez Gonzalez, business director, Hotelero Gran Caribe; and YoslandiAlvarez, main business specialist, Cubanacan.

Garcia Rosa said he is inthe process of assessing whether SAHIC Cuba will be an annual or bi-annualevent going forward.

He shared his overalloutlook for the region. “Perhaps it will take a little bit more time than wasexpected one year ago, but I think we’ve reached the point of no return,” hesaid.

Dennis Nessler    Dennis Nessler
Hotel Interactive®, Inc.
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