While Starwood signs the first deals, boutique and lifestyle hoteliers should seriously consider the Cuban market as an incredible opportunity to open up this unexplored frontier. Many U.S. citizens will be traveling to Cuba for the first time ever over the next five years and boutique properties have the chance to enhance the culture and ambiance of each person’s stay in this beautiful country with superior design, service, and customization that boutique consumers have come to expect and appreciate worldwide.
Starwood has officially signed the deals to take over the management of three historic properties in Havana. This is a remarkable deal since no U.S. hospitality company has been in Cuban property management in over 50 years.
This historic deal opens the door for Boutique properties to follow suit. Cuba is now wide open with sanctions being lifted leaving this market ripe for Boutique and Lifestyle hotels to bring in unique and specialized properties.
While it’s true that there is a presence of some European hotel chains, the arrival of competitors from the United States is likely to improve facilities and service in addition to lead to a surge in tourist interest from the United States. This huge step in normalizing relations between the longtime adversaries comes after President Obama’s visit to Cuba, the lifting of sanctions and restored relations between Cuba and the United States.
The first two hotels to join the Starwood properties are The Hotel Inglaterra, (to join Starwood’s Luxury Collection) and The Hotel Quinta Avenida, (to become a Four Points by Sheraton hotel.) These properties will undergo renovations and then open under their new Starwood brands later this year. Starwood has also signed a letter of intent to convert The Hotel Santa Isabel into a part of its Luxury Collection pending approval by the Treasury. (Both of the other two properties have already been approved.) This hotel overlooks Havana Harbor and former President Jimmy Carter has stayed there twice since leaving office.
The emphasis on iconic design and style, for properties in this destination, is another area where boutique properties thrive. While focusing on the small and personalized experiences, boutique properties can add so much more to the guest’s experience from service to design.
These new deals in Cuba come at an interesting time where Starwood is currently entertaining two competing bids. As of Sunday March 27th 2016 here’s the latest breakdown of the two offers:
Marriott’s Latest Offer:
- $10 billion in stock based on: $79.53 per Starwood share and a Marriott share price of $73.16
- $3.6 billion in cash
- $14.2 billion with vacation rental business
Anbang’s Latest Offer:
- $13.9 billion based on $82.75 per share in cash
- $14.8 billion with vacation rental business
Although as of March 21st 2016 Starwood had entered into an agreement with Marriott, it is likely to terminate this agreement and enter into a deal with Anbang Insurance Group. Marriott may of course up their offer, as they seem to be committed to Starwood, although it seems unlikely that they will want to increase the offer at this point.