Sol Melia to gain over US rivals from Cuba travel ban repeal

MEXICO CITY: Spanish hotelier Sol Melia SA will benefit over US rivals like Marriott International Inc if a bill before US lawmakers this week to end a 46-year travel ban to Cuba is enacted while a broader embargo is kept in place.

The trade embargo would ban US hotel operators from lodging the 1.1 million Americans that the US International Trade Commission says may visit annually if the travel ban is lifted. And repealing the ban may drive business away from other Caribbean resorts operated by US companies, said Robert Muse, a Washington-based lawyer.

“While lifting the travel ban is a perfectly commendable project, the main economic beneficiary will be Sol Melia,” said Muse, who advises US clients on Cuba-related issues. Palma de Majorca, Spain-based Sol Melia is the world’s largest resort operator. It manages 24 hotels on the communist island.

The US House Committee on Foreign Affairs will hold a hearing Nov 19 on the travel ban, the first since Democrats took control of Congress in 2007.

US hotels, mobile phone providers, travel insurance companies and credit card issuers see the bill, known as the “Freedom to Travel to Cuba Act”, as a step to ending the embargo, said Jake Colvin, vice president of the National Foreign Trade Council.

The Washington-based trade association has held about six meetings with dozens of its 300 members to discuss business opportunities with Cuba since President Barack Obama succeeded George W Bush in January.

“If these meetings were taking place under Bush,” who favoured retaining the travel ban, “you could’ve fit everyone interested in a closet”, said Colvin. “Now they’re standing room only.”

Christopher Sabatini, vice-president of the Council of the Americas in New York, agreed that repealing the travel ban may lead to a reconsideration of the embargo. “The idea is to get rid of the travel ban and then let the momentum build,” he said.

The legislation has 179 bipartisan co-sponsors in the House and needs 218 votes to pass if all 435 members vote. A similar bill was introduced in the Senate.

“We certainly would monitor any changes the US government makes regarding doing business in Cuba,” Tom Marder, a spokesman for Bethesda, Maryland-based Marriott said.

UK-based InterContinental Hotels Group Plc says it will not enter Cuba as long as the embargo is in place. The company is subject to US laws because the majority of its investments are in that country, said Alvaro Diago, who is chief operating officer and head of Latin America.

“US hotel companies aren’t getting their fair share of the Cuban market while European companies have already a foot in the market,” Diago said in an interview. “The embargo is the one that dictates whether we will get in.”

US tourists will flock to Cuba because their inability to travel there for almost 50 years has created an “allure” and “mysteriousness” about the island, said Eric Trump, executive vice president of development and acquisitions for Trump Organization, a real estate investment and development company founded by Donald J Trump.

Obama will face pressure from most governments in the region, regardless of their attitude toward Cuba, not to veto the travel ban repeal measure, Sabatini said.

On Sept. 3, Obama ended restrictions on Cuban-Americans travelling and sending money transfers to relatives back home. That’s expected to double to 200,000 the number of US tourists visiting the island this year, Sabatini said.

Obama also allowed US telecommunications companies to provide service in Cuba for mobile telephone, satellite radio and television. Current exceptions to the 1962 trade embargo on communist Cuba include US$500 million (RM1.68 billion) per year in agricultural exports.

“If you are a potato, you can get to Cuba very easily,” Representative Sam Farr, a California Democrat and one of the co-sponsors of the bill, said in a Sept. 21 interview. “But if you are a person, you can’t, and that is our problem.” – Bloomberg LP