Sol Melia to Gain Over U.S. Rivals From Cuba Travel Ban Repeal
By Jens Erik Gould and Nadja Brandt
Nov. 16 (Bloomberg) -- Spanish hotelier Sol Melia SA will benefit over
American rivals like Marriott International Inc. if a bill before U.S.
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 U.S. hotel operators from lodging the 1.1
million Americans that the U.S. 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 U.S.
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
U.S. 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 U.S. 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.
U.S. 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.
Standing Room Only
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 favored 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 U.S. government makes
regarding doing business in Cuba," Tom Marder, a spokesman for Bethesda,
Maryland-based Marriott said.
'Momentum'
U.K.-based InterContinental Hotels Group Plc. says it will not enter
Cuba as long as the embargo is in place. The company is subject to U.S.
laws because the majority of its investments are in that country, said
Alvaro Diago, who is chief operating officer and head of Latin America.
"U.S. 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."
U.S. 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.
'On our Radar'
"Cuba has been on our radar, but until we can actually get in there,
it's harder to plan preliminary steps," Trump, 25, said in an interview.
"We are such a presence in south Florida. It's such a staple for us.
Cuba would fit right in there."
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 traveling and
sending money transfers to relatives back home. That's expected to
double to 200,000 the number of U.S. tourists visiting the island this
year, Sabatini said.
Obama also allowed U.S. 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 $500
million 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."
'Holy Grail'
Orbitz Worldwide Inc. said Nov. 11 that it received 100,000 signatures
for a campaign it started in May called OpenCuba.org. Lifting the travel
ban to Cuba would probably increase Orbitz's revenue from airline and
hotel bookings, Chief Executive Barney Harford said in a Nov. 10 interview.
"It would be a net positive for the industry," Harford said. "The
interest level in Cuba would stimulate incremental travel."
U.S. passengers on Caribbean cruise lines, with their accommodation and
amenities already provided at sea, will demand sightseeing stops in
Havana, said Bob Whitley, president of the United States Tour Operators
Association, which supports lifting the travel ban.
"Cuba is the Holy Grail of cruising," Richard Fain, chief executive
officer of Miami-based Royal Caribbean Cruises Ltd., said in an Oct. 6
interview in New York. "I can't wait until we have a free and open Cuba."
To contact the reporter on this story: Jens Erik Gould in Mexico City at
jgould9@bloomberg.net; Nadja Brandt in Los Angeles at nbrandt@bloomberg.net
Last Updated: November 16, 2009 00:00 EST
Sol Melia to Gain Over U.S. Rivals From Cuba Travel Ban Repeal -
Bloomberg.com (16 November 2009)
http://www.bloomberg.com/apps/news?pid=20601103&sid=asN_tIeGPKBw
