Meliá’s Withdrawal Affects Cuba’s Tourism Amid New U.S. Sanctions

Spanish hotel chain Meliá has decided to reduce its operations in Cuba, joining other companies limiting their activities there. The move follows recent U.S. sanctions and the continuation of an oil embargo. Meliá will stop managing 15 out of the 34 hotels it currently operates on the island, as reported by Cubadebate. This decision impacts Cuba’s tourism industry, which had seen a sharp decline since reaching its peak in 2018.

The announcement on May 26 came shortly after U.S. President Donald Trump issued an executive order intensifying sanctions against Cuba. These measures particularly targeted Grupo de Administración Empresarial S.A. (GAESA), a business group run by the Cuban Revolutionary Armed Forces. The U.S. cited concerns about national security as the reason for the sanctions. Meliá did not provide an immediate comment on the situation.

The executive order affects the assets and U.S. financial activities of foreign companies, severely restricting their operations.

GAESA, formed in the 1990s, has interests in various sectors including car rentals, retail, and transportation. It’s a key partner of Meliá through its subsidiary, Gaviota, in hotel management. Meliá had been managing around 14,000 hotel rooms in Cuba before this partial withdrawal.

According to Lee Schlenker from the Quincy Institute, with declining international tourism and fuel shortages, companies are reassessing their presence in Cuba. This has major implications not only for GAESA but also for ordinary Cubans employed in these sectors.

Some Meliá hotels in popular tourist destinations like Varadero and Cayo Santa María had already been non-operational due to energy issues and reduced demand. The Cuban government attributes ongoing challenges such as blackouts and supply shortages to U.S. sanctions.

Local workers in the tourism industry express concern over Meliá’s decision. For example, Erich López, a driver, noted its potential impact on their livelihoods. Carlos Luis Carbonel, a parking attendant, echoed these sentiments, highlighting the wide-reaching effects on tourism-related jobs.

Other hotel chains, such as Royalton from Canada and Spain’s Iberostar, have also limited their Cuban operations recently. Cuba’s tourism peaked at 4.3 million visitors in 2019 but dropped by 48% in the first quarter of this year compared to 2025, with only 298,000 tourists in early 2025.

The removal of the Royalton Paseo del Prado hotel’s iconic sign in Old Havana signals these operational changes. Meanwhile, the Iberostar Selection, set to open in 2025, has remained closed. Airlines like World2Fly, Air France, and Iberia have canceled flights to and from Cuba.

MasterCard and Visa operations on the island have been suspended, following altered ties between foreign entities and FINCIMEX S.A., related to GAESA. Canadian mining company Sherritt International is also selling its Cuban stake, influenced by these geopolitical tensions.

The U.S. has continued to exert pressure on countries engaging with Cuba, further complicating the situation. Talks were held earlier this year between U.S. and Cuban officials, but tensions remain high.