Spanish Companies in Cuba Face Losses of Up to €100 Million

Spanish hotel chains operating in Cuba are experiencing substantial financial losses, with between €80 million and €100 million trapped in the island's banking system. These funds, which cannot be repatriated, have already been written off in the financial statements of their parent companies, according to a report published on Tuesday in El Economista. The report was authored by an expert who was directly involved in the early stages of Spanish-Cuban tourism collaboration.

This amount reflects the outstanding balance of a cumulative investment of €465 million made by Spanish companies in Cuba over the past three decades, predominantly in the hotel sector. Direct investment by these hotel corporations reached approximately €160 million, making up about one-third of the total.

The Beginning of a Joint Venture

The partnership model began on May 10, 1990, with the opening of the Sol Palmeras hotel in Varadero, marking the first agreement between the Cuban regime and the Sol chain—later known as Meliá—under Gabriel Escarrer. The framework was structured through joint ventures where the Spanish side typically held a 49% stake, with contracts ranging from 25 to 50 years. This involved contributing capital for fixed assets and managing operational tasks, though Cuban law initially barred foreign access to land ownership.

Profitable Years and a Turning Point

The first two decades proved highly profitable. "The historical balance of the Cuban experience shows a net positive outcome for Spanish firms. In fact, profits from the expansion years financed part of these brands' internationalization," the report notes. However, a turning point occurred when GAESA, the Cuban Defense Ministry's business conglomerate controlled by Raúl Castro, amassed enough capital to construct its own hotels. These were operated through management contracts with Spanish and Canadian hotel chains via its subsidiary, Gaviota.

Complications Intensify

The situation worsened with the 2019 activation of Title III of the Helms-Burton Act—previously suspended by earlier U.S. administrations—and the impact of the Covid pandemic. These developments made it impossible for foreign companies to repatriate profits due to the Cuban regime's foreign currency liquidity shortages.

The final blow came with Executive Order 14404, signed by Donald Trump on May 1, 2026, which imposed secondary sanctions against GAESA, setting June 5 as the deadline for foreign companies to sever ties with the group. Iberostar withdrew from 12 of its 18 Gaviota-linked hotels on June 1, and Meliá announced its exit from 15 of its 35 hotels on the island. Canadian company Blue Diamond Resorts exited its 62 establishments on May 31, while Barceló is preparing its departure without renewing contracts in 2027.

Navigating the Future

Nevertheless, chains maintaining contracts with civilian entities like Mintur or Gran Caribe—excluded from the U.S. sanctions list—are not entirely leaving the island. The analysis suggests they possess operational knowledge and institutional relationships that American corporations will lack when the system changes.

Simultaneously, the Cuban regime announced a package of 176 economic reforms in June, including authorizing private banks and converting state businesses into commercial companies. However, economist Mauricio de Miranda noted that GAESA is not mentioned in any of these measures, casting doubt on the reforms' true depth.

"No authority or investor will overlook the Spanish hotel chains, which are essential for managing the sector's transition," the analysis concludes, comparing their role to that of these companies following the fall of the Soviet bloc in Eastern Europe.