Spanish Hotel Giants Iberostar, Meliá Retreat From Cuba Under U.S. Sanctions Threat

Two of Spain's largest hotel companies are pulling out of much of their business in Cuba, bowing to the threat of U.S. sanctions days before a Treasury Department deadline requiring foreign firms to sever ties with the island's military-run tourism conglomerate.

Meliá Hotels International said Wednesday it would stop managing and branding 15 hotels in Cuba, a day after Iberostar withdrew from 12 of the 18 properties it operated on the island. The moves mark a partial exit by the two Mallorca-based chains, long the most prominent foreign operators in Cuban tourism.

Both decisions come ahead of a June 5 deadline set by the U.S. Treasury Department for foreign companies to end dealings with GAESA, the conglomerate controlled by the Cuban military, or face secondary sanctions. The penalties stem from an executive order President Donald Trump signed May 1 directing action against those Washington blames for repression in Cuba and threats to U.S. national security.

Neither company officially tied its withdrawal to the U.S. pressure. Iberostar said in a statement that the move was part of a process of adapting to the international regulatory environment, aimed at preserving its standards of quality and compliance. The 12 hotels it left were managed in partnership with Gaviota Tourism Group, GAESA's operational arm. Iberostar said it would keep a presence at properties not covered by the sanctions.

Meliá, owned by the Escarrer family, has operated in Cuba since 1999 and holds the largest Spanish footprint on the island. For the company, the threat was more legal than financial. Most of the 15 affected hotels have been closed for months because of Cuba's deepening energy crisis.

The Spanish chains are not alone. Canada's Blue Diamond Resorts announced its own withdrawal earlier in the week, ending management of dozens of properties. Archipelago International, operating under its Aston brand, and Minor Hotels, which ran two Havana properties under the NH brand, had already scaled back. Together, the departures amount to a broad retreat by international operators.

Gaviota operates 121 hotels and resort villas in Cuba, with more than 44,000 rooms. Nearly half of those properties run through partnerships with Spanish chains such as Meliá, Iberostar, H10 and Riu, leaving a large share of the country's hotel capacity exposed to sudden isolation.

The pullback hits a tourism sector already in steep decline. Cuba drew about 328,600 international visitors from January through April, a drop of nearly 56% from the same period a year earlier. Meliá was operating at roughly half capacity on the island, with occupancy near 34% and net profit down 68%.

Tourism is one of several casualties of an economic and energy crisis that has gripped Cuba for months. A fuel shortage, which officials attribute to U.S. pressure on the island's oil supply, has prompted some airlines to cancel flights to Havana. Iberia ended its Madrid-Havana route this week.

The sanctions target firms that maintain business with GAESA in sectors including energy, defense, mining and financial services. They also bar providing funds or services to individuals named by Washington, among them Ana Guillermina Lastres, a military officer who directs the conglomerate.

The withdrawals have drawn concern in Spain, where both chains are based. Jaume Bauzà, the tourism minister for the Balearic Islands, said regional authorities were monitoring the situation and offered support. "We will look after them," he said, describing the matter as commercial but pledging to help if possible. He added that he hoped the situation could be resolved quickly for the companies and for the Cuban people.

The exits leave Cuba's strained economy facing a fresh blow as the summer travel season approaches, with little sign the foreign operators will return soon.