The banking expert and attorney Alberto Luzárraga has labeled the business practices of European and Spanish companies in Cuba as a "deceptive investment" and a "scam." He argues that these companies, operating under a mandatory state-mediated system, should be tried for exploiting hotel workers in a future free Cuba.
Luzárraga highlighted that the hotel investment model on the island involves state entities acting as intermediaries between foreign companies and workers, pocketing most of the salaries paid in foreign currency by these companies.
"There are numerous European and Spanish companies that have ventured into Cuba's hotel industry, but this investment is truly deceptive because they are paying wages below the international market rate," Luzárraga stated.
According to Luzárraga, the Cuban workers bear the brunt of this system: "The Cuban regime was already being underpaid, but the Cuban workers were being exploited because, as you know, most of their wages were paid to the government, leaving them with a pittance."
The attorney contended that this practice breaches the United Nations Convention 80, which forbids such practices in the context of foreign investments: "This intermediary takes a share of the money, and the worker doesn't receive what they are entitled to. It is essentially a scam defrauding Cuban workers."
From a legal standpoint, Luzárraga was unequivocal: "All those contracts, in my opinion as a lawyer, are void because they are founded on an illicit cause. The illicit cause is defrauding a third party, rendering them invalid."
Spotlight on Meliá Group's Operations in Cuba
Luzárraga pointed to the Meliá Group as the most notable example of this model, being the largest foreign hotel operator on the island: "Mr. Meliá has indulged in filling his pockets with what he has done in Cuba. He owes us, he owes money to the Cuban people. He has defrauded Cuban workers of significant amounts. He owes wages and damages," Luzárraga asserted.
The system Luzárraga described is backed by Cuba's Foreign Investment Law 118, which bans direct hiring of Cuban workers, forcing foreign companies to work through state employment agencies linked to GAESA, the Cuban military's business conglomerate.
The Cuban Observatory for Human Rights has slammed Meliá, Iberostar, and Barceló for "feudal exploitation" and breaching International Labor Organization agreements, documenting that Cuban hotel workers for Spanish chains earn between $11 and $16 monthly in Cuban pesos, while rooms are charged in foreign currency at international rates.
Luzárraga disclosed past attempts to address this issue in Spanish courts, but to no avail: "Years ago, I tried with some friends in Spain to address this matter, filed a lawsuit, but it was dismissed due to too many vested interests."
When directly asked if these companies would be taken to court in a free Cuba, the attorney was clear: "Absolutely, and rightly so, there has been excessive abuse."
Impact of Cuba's Tourism Downturn
The collapse of Cuba's tourism sector exacerbates the situation: hotel occupancy plummeted to 21.5% in the first half of 2025, and at the Meliá Cayo Santa María hotel, employees faced five months without pay as of March 2026, with debts tallying 17,000 Cuban pesos per person.
Key Legal and Economic Concerns in Cuban Hotel Investments
What is the main criticism of the investment model in Cuban hotels?
The main criticism is that foreign companies are operating through state intermediaries, which take most of the salaries paid, resulting in the exploitation of Cuban workers who receive only a fraction of their earnings.
How does the Foreign Investment Law 118 affect workers in Cuba?
The law prohibits direct hiring of Cuban workers by foreign companies, forcing them to go through state-run employment agencies, often linked to the military, which reduces the actual wages received by workers.
Why did past legal efforts to address this issue in Spain fail?
Efforts failed due to numerous vested interests in the Spanish legal and business systems that dismissed the lawsuit, preventing further legal action.