Cuba Business

Cuba Tourism Ministry forces merge of state owned Cubanacan and Gran Caribe

Posted October 15, 2004 by publisher in Cuba Business.

By Marc Frank | Reuters

Ernest Hemingway’s favorite bars in Havana are under new management in a drive by Cuba’s Communist government to increase control over its main cash cow, the tourist trade.

The Tourism Ministry has directly taken over restaurants and other night-life spots, including Havana’s famed Tropicana cabaret, that had been managed autonomously by state-run hotel groups, industry sources said on Tuesday.

The move is part of a massive shake-up of Cuba’s tourism companies aimed at wiping out middle-management corruption and maximizing income from the $2 billion-a-year tourist trade for President Fidel Castro’s financially strapped government.

“The Tourism Ministry is stripping hotel groups of their extra-hotel businesses and centralizing them under its own direction,” said a Havana tourism official, who asked his name not be used.

This follows centralization of retail stores and transport and car rental services, and the restructuring and merger of hotel groups begun in March.

The changes are part of the government’s move to reverse modest market-oriented reforms adopted after the collapse of the Soviet Union plunged Cuba into economic disarray more than a decade ago, forcing it to open up to tourism and foreign investment.

Under the reorganization, to be completed by November before the peak tourism season begins, various companies, including the ministry’s extra-hotel group Rumbos, will be merged.

The Gran Caribe hotel group was stripped of the Floridita and Bodeguita del Medio bars, obligatory stops for tourists seeking the Havana of American writer Ernest Hemingway who drank his daiquiris and mojitos there.

Tourism Minister Manuel Marrero was appointed earlier this year with a mandate to stamp out corruption and reorganize the leisure industry.

Dozens of managers who rode a tourism boom that has averaged 10 percent growth per year since 1990, have been removed.

Hundreds of mid-level management positions have also been cut as many secondary operations of the three big state-owned tourism companies (Cubanacan, Gran Caribe and Isla Azul), which control 30,000 of 42,000 hotel rooms in the country, are merged.

Member Comments

On October 15, 2004, publisher wrote:

Is there a bigger story behind the scenes here?

Raul Castro runs Gaviota and (I believe) the Ministry of Tourism.

Is he posturing to control the major source of revenue coming into Cuba?

Raul vs. Fidel?

For the real story, always follow the money.