Starwood scores first US-Cuba hotel deals since 1959

Starwood Hotels & Resorts Worldwide said Saturday it has signed three hotel deals in Cuba, a first for a US hospitality company since the 1959 revolution on the communist-run island.

Starwood said two of the hotels would open later this year and that it had signed a letter of intent for a third.

The announcement came on the eve of a historic visit to Cuba by US President Barack Obama.

"We are confident Starwood is the right partner to help write the next chapter of relations between Cuba and American business, and we moved quickly and enthusiastically to pursue opportunities following recent government actions," said Kenneth Siegel, Starwood's chief administrative officer and general counsel.

Instead of building from the ground up, Starwood is moving into existing upscale properties in need of renovations: the landmark Hotel Inglaterra will become a member of its Luxury Collection and the Hotel Quinta Avenida will be rebranded as Four Points by Sheraton Havana.

A letter of intent was signed with Cuba's Habaguanex, owner of the Hotel Santa Isabel, to also convert it to a member of the Luxury Collection.

"As we've seen throughout the world, our entry into new markets has a positive effect on local communities, preserving and protecting the culture and delicate ecosystems while improving employment opportunities, which were driving forces in our discussions," Siegel said.

- Timing is everything -

Starwood's chief executive underscored the importance of timing in scoring the deals.

"With Cuba's rich history, natural beauty and strong culture, there is no question the entire US hospitality industry has watched Cuba with great interest, and we are thrilled to lead the charge and bring our sophisticated, high-end brands into the market at this inflection point," said Thomas Mangas.

Already booming tourism is set to explode in the wake of Obama's visit, when he'll bury a more than half-century-long conflict that left Cuba the last major undeveloped market in the Caribbean.

Obama, First Lady Michelle Obama and their two daughters arrive in Havana Sunday for the symbolic three-day trip.

It won't just be the first visit by a sitting US president since Fidel Castro's guerrillas overthrew the US-backed government of Fulgencio Batista in 1959, but the first since President Calvin Coolidge came 88 years ago.

Obama and Cuban President Raul Castro surprised the world in simultaneous speeches announcing their countries would begin normalizing relations back on December 17, 2014.

The 44th US president will hold talks with the communist government, but the White House has made it clear the emphasis will be on reaching out to the Cuban people directly.

On Tuesday, Obama will give a speech at the National Theater that will be carried live on Cuban television, giving Obama a unique platform to make his case.

Though Obama has loosened restrictions on US citizens visiting Cuba, the lifting of a decades-old US economic embargo can only be decided by a Republican-dominated Congress that is far less keen on detente.

Starwood said it signed the deals to enter the Cuban market after getting the green light to do so from the US Treasury Department.