The US government has authorized investment in Cuba in specific sectors, including agriculture, telecommunications, tourism, construction, medicine and biotechnology.

US-based hotel and leisure company Starwood Hotels & Resorts this week signed a letter of intent to manage and market two properties in Havana and could expand this deal to a third property, Jorge Giannatasio, Starwood’s senior vice president and head of Latin American operations told local media from Havana.

Under the agreement, Starwood will manage the Hotel Inglaterra and Hotel Quinta Avenida, and both properties are expected to be re-branded under the Starwood name later this year.

Hotel Inglaterra at present is owned by Cuba’s Gran Caribe, a state-owned tourism firm, and will be re-branded under the Starwood Luxury Collection brand. The Quinta Avenida is managed by Cuba’s military-operated tourism group Gaviota. It will be re-branded under Starwood’s Four Points by Sheraton hotel label. 

The agreement could serve as a harbinger for rival US hoteliers to enter Cuba’s tourism sector. New regulations surrounding relaxed travel regulations from the USA to Cuba are expected to allow US companies to invest in the hotel and lodging sectors, Alex Lee, deputy assistant secretary for South America and Cuba at the US State Department, said at last week’s 2nd Cuba Opportunity Summit in New York City.

Financing trade flows

Stonegate Bank could provide trade financing to US companies that do business in Cuba, chief executive officer David Seleski said at the 2nd Cuba Opportunity Summit in New York City last Thursday.

Stonegate was the first US bank to sign a correspondent banking deal with a Cuban bank after a diplomatic thaw between the two countries began in December 2014.

“We are at the very initial stages. We are looking for the right US company, the right sector, the right way to do it,” Seleski told LatinFinance.

If the lender completes a couple of trade financing transactions, the next step would be to lead a syndicated loan for a larger transaction and introduce other banks into the relationship, he said.

Seleski also said that Stonegate would consider providing trade financing to private businesses in Cuba but it would need a letter of credit letter from a Cuban bank, which is a more distant possibility.

The US Treasury Department’s Office of Foreign Asset Control (OFAC) granted permission last month to Alabama-based Cleber to build tractors in Cuba. Still, out of the approximately $6bn in exports approved by the US Commerce Department since relaxing the embargo, only a tiny fraction has materialized, Lee said.