Changes in Cuba policy could adversely impact Trump's hotel competitors

Story highlights

  • Trump's company pledged before his presidency that they would not pursue any foreign deals
  • But the decision is an example of Trump's ability to impact his business' competitors while President

Miami (CNN)The proposed changes in US-Cuba relations that President Donald Trump will unveil Friday in Miami could adversely impact hotel brands that directly compete with Trump's business empire, making it more difficult for them expand their foothold in Cuba.

Trump's changes in Cuba policy include prohibiting "financial transactions, including transactions incidental to travel with GAESA and its affiliates, subsidiaries, and successors," according to documents reviewed by CNN. Gaviota, the tourism arm of the government-run GAESA, currently operates the Four Points by Sheraton Havana, a hotel that, when it opened, was the first US hotel to open in Cuba in nearly 60 years.
GAESA, the company directly targeted by Trump's plan, controls large swathes of the Cuban economy and is run by Gen. Luis Alberto Rodríguez López-Callejas, Raul Castro's son-in-law.
    Even Americans traveling legally to Cuba, according to the new Trump policy, would not be able to stay in any hotel connected to the Cuban military, including the Four Points by Sheraton in Havana.
    The Trump proposal would include exemptions to this policy, but none appear to include hotels like the Sheraton or future projects.
    Trump told CNN in 2016 that he was interested in opening a hotel in Cuba "when we're allowed to do it." But Trump's company pledged before his presidency that they would not pursue any foreign deals while he was in the White House, putting off any possible entry into the Cuban market.
    But the decision to prohibit business with GAESA to direct tourists to private companies and AirBnB is an example of Trump's ability to impact his business' competitors while in the White House. Trump's prohibition, in effect, puts other hotel companies on equal footing with his personal company -- not allowed to pursue future business in Cuba.
    Starwood, which merged with Marriott last year, manages the Sheraton Hotel brand. Marriott President Arne Sorenson told reporters that the Trump administration should "recognize and utilize travel as a strategic tool in its efforts to improve relations with Cuba, allowing us to be part of a promising future, as opposed to reverting to the policies of the past."
    He noted that the hotel company has "invested significant resources establishing a presence in Cuba, and with one hotel open and another in the pipeline, we have just begun our work creating opportunity and a more vibrant tourism sector on the island."
    Sorenson added that it would be "exceedingly disappointing to see the progress that has been made in the last two years halted and reversed by the administration."
    White House officials told reporters on Thursday that the new regulations would not affect current licenses for hotels and was not meant to "disrupt existing transactions that have (already) occurred." The detailed regulations are slated to rewritten by the Treasury Department.
    The goal of this policy proposal, according to a fact sheet on the plan, is to push the "Cuban government to expand the development and availability of more lodging, transportation and entertainment options for US travelers by allowing the Cuban private sector space to grow and flourish."
    The policy has been embraced by anti-Castro Republicans, including Sen. Marco Rubio, who has long pushed for tougher relations with Cuba and decried former President Barack Obama's 2014 thawing of relations with the Castro regime.
    "(Trump's) objective is to support the Cuban people by driving US visitors to small business they own so they can become independent of regime," the Florida Republican tweeted Friday. "That is why no direct transactions will be allowed with the businesses owned & operated by the military monopoly or its affiliates."
    He added, "Individual Americans can travel to #Cuba under Support for the Cuban people category but must use privately owned lodging like AirBnB."
    Rubio will attend Friday's speech by Trump on Cuba.