U.S. sanctions force hotel operators to leave Cuba

Cuba’s economy entered June facing another setback following the departure of Iberostar and Blue Diamond Resorts, two of the largest foreign hotel operators in the country.

After a U.S. Treasury Department ultimatum setting Friday as the deadline for foreign companies to sever ties with the Cuban military-controlled conglomerate GAESA, Canadian hotel operator Blue Diamond Resorts announced its immediate withdrawal from Cuba, while Spanish chain Iberostar removed its brand and ceased operations at at least 12 of its flagship hotels, News.Az reports, citing UPI.

President Donald Trump's administration issued an executive order May 1 directing sanctions against "those responsible for repression in Cuba and threats to the national security and foreign policy of the United States."

The measure required foreign individuals and entities, including financial institutions, to wind down "transactions involving GAESA or any entity in which GAESA owns, directly or indirectly, a 50% or greater interest."

Blue Diamond, which manages 62 properties across Cuba, confirmed it had transferred control of the hotels it operated to Gaviota Tourism Group, a company linked to Grupo de Administración Empresarial S.A., known as GAESA. Cuban news outlet 14ymedio reported the move after contacting several Havana hotels previously managed by the Canadian company.

In a statement distributed by wholesale tour operator Sudameria Travel, Blue Diamond said it was ending operations in Cuba because of current conditions in the country's tourism sector and persistent operational limitations affecting the destination, including logistical, infrastructure and supply challenges.

The withdrawal covers all activities associated with the Blue Diamond Resorts Cuba, Blue Diamond Cuba, Royalton, Memories, Starfish, Mystique and Resonance brands.

"From this date forward, future reservations, inquiries and coordination will be handled directly by the respective hotel owners and/or corresponding local operating entities," the statement said.

Gaviota Tourism Group operates 121 hotels and resort villas in Cuba, totaling more than 44,000 rooms. Nearly half of those properties operate through partnerships with Spanish hotel chains, such as Meliá, Iberostar, H10 and Riu, exposing a significant portion of the country's hotel capacity to immediate operational isolation.

According to tourism industry publication Preferente, Spain's leading hotel chains also have begun to formalize their exit from Cuba to avoid potential U.S. sanctions.

Iberostar Cuba Hotels & Resorts will stop operating and marketing 12 properties on the island beginning Monday, Cuban journalist Mario Pentón reported.

The affected hotels include major properties in Havana, Varadero and the offshore cay resorts, such as Iberostar Grand Packard, Iberostar Selection Ensenachos and Iberostar Selection Holguín. Iberostar has not publicly commented on the reports.

Meliá Hotels International, the largest foreign hotel operator in Cuba, has reportedly cut its operations by half after posting a 68% decline in annual profits, while also seeking to shield itself from the new U.S. regulations, according to Diario de Cuba.

The island's shortage of aviation fuel has led to the cancellation of numerous direct flights to Cuba, including from Canada, its largest source market for international visitors, causing significant losses for Meliá.

Data from Cuba's National Office of Statistics and Information show that tourist arrivals from the country's main source markets, including Canada, Cuban nationals living abroad, Russia, Germany, Italy, Spain, France and the United Kingdom, declined sharply during the first four months of the year.

Combined arrivals from those markets totaled 219,610 visitors, a 59.5% decline compared with the same period in 2025 and an 81.9% drop from the same period in 2019, the last full year before the COVID-19 pandemic.

News.Az 

By Ulviyya Salmanli