Melià's withdrawal puts an end to 36 years of Mallorcan hotel presence in Cuba

PalmaMeliá's history in Cuba began on May 10, 1990, with the opening of Sol Palmeras in Varadero. The company, then still called Sol Meliá, became the first foreign firm to establish a mixed-capital company with the Cuban communist government to administer, market, and manage a hotel. Thirty-six years later, the Palma-based chain closes an era that contributed both to the Caribbean island's opening to international tourism and to positioning the Mallorcan company at the forefront of the global hotel sector.

Meliá will cease all activity in Cuba this Friday, July 24, due to the "notable operational, legal, economic, and financial difficulties" the country is experiencing as a result of the United States blockade. The decision affects the 34 hotels the company has on the island, although some were already closed.

The chain and its Portuguese subsidiary, Ilha Bela Gestao e Turismo, through which it operates in Cuba under a management regime, have informed the National Securities Market Commission (CNMV) this Tuesday of the termination of services at all establishments.

According to Meliá, the difficulties that persistently affect the country make a "minimum operational stability" impossible, "in fact and by law," Efe reports. The cessation also extends to the use of authorized brands, the receptive activity for tourists, and the local supply chain linked to the hotels' provisioning.

The Portuguese subsidiary is now working to ensure an orderly transition and to reduce the impact of the withdrawal on workers, suppliers, and customers as much as possible. Meliá is also evaluating the financial consequences of the decision, which include a potential review of the accounting value associated with Cuban activity. The company will specify this impact when it publishes its first-half results.

A sustained expansion

Meliá's arrival in Cuba occurred when tourism was beginning to consolidate as a strategic sector for the country's economy. In the following years, the chain's presence grew steadily. In 2005, celebrating its first fifteen years in Cuba, Meliá was already operating 21 hotels and 8,479 rooms. The company claimed to have hosted nearly a third of the tourists who had visited the island.

Five years later, Cuban official media estimated that the Spanish company's activity had generated 3,664 million dollars in revenue for Cuba during the first two decades. The group, then led by Gabriel Escarrer Julià and currently headed by his son, Gabriel Escarrer Jaume, managed 25 hotels, with more than 10,400 rooms, and marketed 21% of the island's hotel capacity.

The expansion continued during the following decade. In 2013, the company incorporated a new complex in Varadero, its 26th establishment in Cuba. By 2019, it was managing 34 hotels and planned to finish the year with four more. Meliá then spoke of a "deep bond" and defended that Cuba was part of the company's DNA.

The bet was maintained despite the activation in the United States of Title III of the Helms-Burton Act, which opened the door to lawsuits for expropriations derived from the Cuban Revolution of 1959. Melià always maintained that it operated legitimately, that it was not the owner of the properties it marketed, and that it acted mainly as a manager.

From the pandemic to the blockade

The relationship began to deteriorate with the tourism crisis caused by the pandemic, which aggravated operational problems. In 2021, Melià stopped managing three hotels due to its "scarce commercial opportunities" after the collapse of activity following the coronavirus.

The complications intensified with the start, in January 2025, of Donald Trump's second term in the White House. The US government imposed a strict blockade on Cuba and threatened to sanction companies operating there in collaboration with the regime of Miguel Díaz-Canel.

The intervention of the United States in the region at the beginning of this year has generated, according to Melià, a "supervening difficulty" in obtaining fuel that, added to the commercial blockade, has strongly affected the tourism market.

The results of the first quarter already reflected this deterioration. The company had closed 50% of its operational capacity in Cuba. The 34 hotels it kept in its portfolio, with 14,053 rooms, were open, on average, only 60% of the days of the quarter. Melià also had two more establishments in project that it initially planned to open this year.

Cuban hotel occupancy fell to 34.1%, 6.5 points less than in the first quarter of the previous year and well below Melià's overall portfolio of 58.8%, which had increased by 1.7 points.

Revenue per available room – the indicator that combines occupancy and profitability of establishments – stood at 34.4 euros, 8.6% less than a year earlier. The average for all of the company's hotels was 84 euros.

On June 3, Melià had already announced the immediate departure of 15 hotels due to the “geopolitical, social, legal, and economic context”. The withdrawal is now complete with the cessation of all activity. Thus ends, at least for now, 36 years of a business relationship that began with the rise of Cuban tourism and has ended after a long period of resistance.

Other chains are also leaving

Melià's withdrawal is not an isolated case. Iberostar has confirmed that it no longer operates or markets any hotels in Cuba, while Barceló has also ceased its activity there. With the departure of the three groups, an end is put to more than three decades of presence of the major Mallorcan hotel companies on the island, where they were protagonists in the development of international tourism.

The coincidence of the three withdrawals highlights the change in scenario that the Cuban hotel sector is experiencing. The difficulties in maintaining activity, which have worsened in recent years, have ultimately led the main Spanish chains to abandon a market that for decades had been strategic for their international expansion.