Meliá Pulls Back Amid U.S. Sanctions, Impacting Cuba’s Tourism

Spanish hotel chain Meliá announced it will cease operations at 15 of its 34 hotels in Cuba. The decision comes after the U.S. introduced new sanctions while maintaining an existing oil embargo, according to reports from Cubadebate. This move is a setback for Cuba’s critical tourism industry, which has declined since reaching its peak in 2018.

The decision was publicized on May 26, shortly after U.S. President Donald Trump signed an executive order that increased sanctions against Cuba. These sanctions mainly targeted Grupo de Administración Empresarial S.A. (GAESA), a conglomerate managed by the Cuban Revolutionary Armed Forces. The U.S. claims GAESA poses a threat to national security.

Meliá’s withdrawal impacts approximately 14,000 rooms in Cuba, severely affecting the tourism workforce and economic stability. Researcher Lee Schlenker from the Quincy Institute noted that Spanish and Canadian companies are among the largest investors in Cuba’s hotel sector.

The ongoing issues—such as decreased international tourism and fuel shortages—are compelling companies to reconsider their business activities in Cuba. Many Cubans employed in the tourism industry worry about the economic repercussions. Erich López, a Cuban driver, expressed concern that the changes might affect his livelihood. Carlos Luis Carbonel, a parking attendant, echoed similar sentiments about the widespread impact.

Other hotel chains, such as Canada’s Royalton and Spain’s Iberostar, have also suspended or scaled back operations in Cuba. The tourism decline is evident, with only 298,000 tourists arriving in the first quarter, significantly lower than the numbers in previous years.

Issues are exacerbated by airlines like World2Fly, Air France, and Iberia canceling flights to Cuba. The suspension of Visa and MasterCard services by Cuba’s Central Bank adds to the financial disruptions, following the breakdown of relations with foreign partners linked to GAESA.

Canadian miner Sherritt International Corp. recently signed a non-binding agreement to divest from a Cuban mining venture. This action aligns with the broader trend of foreign companies retracting due to U.S. policies. The U.S. has also threatened tariffs on nations supplying oil to Cuba, adding pressure to an already strained relationship.