Statement of Marriott International: "Marriott International has been notified by the U.S. Department of Treasury that we must wind down our operation of the Four Points Sheraton in Havana, Cuba by August 31, and that we will not be permitted to open other hotels in Cuba that have been in preparation. We entered the Cuban market in 2016, with permission from the U.S. government. Our operating license was reviewed and renewed in 2018. We have recently received notice that the government-issued license will not be renewed, forcing Marriott to cease operations in Cuba. Marriott continues to believe that Cuba is a destination that travelers, including Americans, want to visit. Marriott looks forward to reopening in Cuba if and when the US Government gives us permission to do business there again."

From the moment in November 2016 when Donald Trump became President-Elect Donald Trump, all licenses from the OFAC to United States companies for commercial activity in Cuba had a bullseye painted upon them. If President Obama's name was attached to an initiative, it was prepared for execution.

The Trump Administration decision for the OFAC not to renew the license of Marriott International is not surprising, but is disappointing as the Four Points By Sheraton Havana was the sole space for employees who are Cuban to learn about how a global United States company operates and position them for opportunities in the hospitality sector.

The Trump Administration viewed the operation by Marriott International similar to how it viewed cruise ship operations- an example of Obama Administration policy failure to change Cuba rather than provide Cuba with additional revenues which are used to forestall necessary commercial and economic changes vital to the country.

From The Miami Herald: "We recently received a notice that the government-issued license will not be renewed, forcing Marriott to suspend its operations in Cuba," said Kerstin Sachl, the company's director of Public Relations for Latin America and the Caribbean.”

Second-largest certified claimant, Bethesda, Maryland-based Marriott International, Inc. (2019 revenues approximately US$21 billion) and its subsidiary, Stamford, Connecticut-based Starwood Hotels and Resorts Worldwide LLC, have a series of two-year licenses from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington DC to manage two (2) properties located in the Republic of Cuba.

The largest certified claim (Cuban Electric Company) valued at US$267,568,413.62 is controlled by Boca Raton, Florida-based Office Depot, Inc. The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Marriott International; the certified claim also includes land adjacent to the Jose Marti International Airport in Havana, Republic of Cuba.

The OFAC licenses were first issued in March 2016 during the Obama Administration and were renewed during the Trump Administration, although there has been a reported delay by the OFAC in transferring the licenses from Starwood Hotels and Resorts Worldwide LLC to Marriott International.

Both properties (one currently through Starwood Hotels and Resorts Worldwide LLC) are in the city of Havana, the 186-room Four Points by Sheraton Havana (which employs approximately 125 Republic of Cuba citizens) and 83-room Hotel Inglaterra (delayed opening without public explanation from December 2016 to December 2017 to December 2019 to “sometime” in 2020).

Both properties are owned by entities controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR).

Marriott International reported that the OFAC-authorized management contract for at least one of the properties requires the investment of millions of United States Dollars; unstated as to the shared responsibility for that investment.

Which US Company May (But Hopefully Won't) Have A “Big-League” PR Problem? Starwood/Marriott (June 13, 2017)

If (and it remains uncertain) the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury does not rescind or require modification of the license issued in 2016 to Stamford, Connecticut-based Starwood Hotels and Resorts Worldwide (a subsidiary of Bethesda, Maryland-based Marriott International), both companies may be in a potentially untenable position due to the Trump Administration’s expected efforts to discourage transactions with entities affiliated with and/or controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR). LINK: http://foresightcuba.com/grupos-empresariales-del-minfar/

For the Trump Administration, the goal may be to elicit from all of the forty-nine (49) United States companies (LINK TO LIST) with a presence in the Republic of Cuba answers to the following questions: Will they change the Republic of Cuba or will they be changed by the Republic of Cuba? Will they be agents for change or agents for the status quo?

In 2016, the Obama Administration directed the OFAC to issue a license to Starwood Hotels and Resorts Worldwide for a multi-year management agreement (the term of which has not been disclosed) with Republic of Cuba government-operated Gaviota (controlled by FAR/GAESA) which owns the Hotel Quinta Avenida (re-branded as Four Points Sheraton Havana on 27 June 2016).

In 2016, the Obama Administration directed the OFAC to issue a license to Starwood Hotels and Resorts Worldwide for a multi-year management agreement (the term of which has not been disclosed) with Republic of Cuba government-operated Gran Caribe (not controlled by FAR/GAESA) to manage the Hotel Inglaterra and transform it into a member of the Luxury Collection. The implementation of the management contract has been delayed for unannounced reasons from December 2016 to December 2017 and recently to December 2019.

In 2016, Starwood Hotels and Resorts Worldwide reported signing a Letter of Intent with Republic of Cuba government-operated Habaguanex (absorbed by FAR/GAESA in 2017) to manage a third property, the Hotel Santa Isabel. Starwood Hotels and Resorts Worldwide has provided no information about the property since 2016.

The Trump Administration is expected to position publicly (the art of persuasion) that they know the companies will “do what’s right for the Cuban people.” The “kick over the goal post” is for the companies to make unilateral non-required changes. The White House may then embrace the effectiveness of the President’s use of the “bully pulpit.”

There would then be pressure upon Starwood Hotels and Resorts Worldwide (and Marriott International) to modify or relinquish the management agreement with Gaviota.

If the company did not modify the management contract, Members of Congress and the Trump Administration could target the company as undermining United States policy and acting in a manner inconsistent with United States policy, which could be used to rescind the license from the OFAC.

All OFAC licenses are issued on the basis that they may be revised or rescinded at any time if they no longer are consistent with United States policy.

There has yet to be an announcement from Boston, Massachusetts-based General Electric (2016 revenues exceeded US$126 billion), the largest United States-based company by far (in terms of revenue) to have engaged with the Republic of Cuba. Although the company has not confirmed export of products or services, the government of the Republic of Cuba confirmed that the company is providing parts and equipment for a power plant. The Obama Administration specifically authorized the transactions as advancing benefit to the citizens of the Republic of Cuba rather than to the government of the Republic of Cuba.

Important to appreciate that policy decisions by the Trump Administration relating to the Republic of Cuba resemble a quad, or perhaps a Quadrophenia. The President remains untethered to ideology; he views issues relating to the Republic of Cuba in transactional terms and optical terms (how it looks is often more significant than what it does). The White House Staff are substantially agnostic relating to the Republic of Cuba; there are a few- and that is all that is sometimes required, for an issue of no importance to metastasize into an issue that can be reformulated into a muscular and optically-pleasing policy initiative.

Members of The Cabinet view the Republic of Cuba as another among many issues requiring attention; but none believe that the Republic of Cuba is or should be a priority and no Secretary will singularly attach (in a defensive posture) themselves to issues relating to the Republic of Cuba and risk positioning for other issues of greater importance to their departments. Officials and employees within Agencies and Departments share the positions of The Cabinet, but are generally supportive of a modified laissez-fare; poke and prod and baste as required for fragmented, but forward mobility.

For Members of Congress, the issue of the Republic of Cuba is both transactional and commoditized. Although there is bipartisan support for both incremental and dynamic changes to United States statutes, no member(s) of the House of Representatives or the United States Senate will prevent “must-pass” legislation on any matter from becoming law unless issues relating to the Republic of Cuba are addressed. No one will volunteer to be a Captain Ahab.

How does The Honorable Paul Ryan, Speaker of the United States House of Representatives, have a role in the Starwood Hotels and Resorts International/Marriott presence in the Republic of Cuba?

Will Trump Administration Permit Marriott To Purchase Supplies From New Military-Affiliated Company In Cuba? (January 12, 2019)

Will The Trump Administration Object To Marriott Hotels Purchasing Products From New Hotel Supply Company Affiliated With Cuba’s Military?

The Same Company Owns Hotel Marriott Manages And The Hotel It Will Manage

Palma de Mallorca, Spain-based Iberostar Group has commenced operation of Logistica Hotelera del Caribe S.A. (LHC), a 32,000 square foot hotel product distribution center located within the Mariel Special Development Zone (ZEDM), forty minutes south-west of the city of Havana, Republic of Cuba. Link to Iberostar Media Release

LHC is providing products to the nine (9) properties in the Republic of Cuba that are managed by Iberostar Group. Eventually, LHC will offer products to hotels throughout the Republic of Cuba. Initially, LHC has approximately five hundred (500) products from fifty (50) suppliers.

The partner in LHC is A.T. Comercial S.A., a subentity of Grupo de Administracion Empresarial S.A. (Enterprise Management Group), or GAESA, which is, in turn, controlled by the controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR).

Managed by the United States Department of State: “The Cuba Restricted List contains entities and subentities controlled by the Cuban military, intelligence, and security services or personnel. Direct financial transactions with these entities and subentities are generally prohibited because they would disproportionately benefit those services or personnel at the expense of the Cuban people or private enterprise in Cuba. For more information on the Cuba Restricted List, please refer to Treasury regulations at 31 Code of Federal Regulations (CFR) part 515, here, and to Commerce regulations at 15 CFR parts 730-774, here. Link To List: https://www.state.gov/e/eb/tfs/spi/cuba/cubarestrictedlist/287349.htm” A.T. Comercial S.A. is on the Cuba Restricted List.

From Iberostar:

Question: Does LHC also sell its products to non-Iberostar-managed properties in the Republic of Cuba? Meaning, can Starwood, Accor, Sol Melia, Gaviota, etc. also purchase products from LHC at the same prices as Iberostar properties? Yes, although in a first phase we will focus on hotels managed by Iberostar. The reason is to guarantee the correct functioning of the operation.

Question: May I have a list of the 500 products and 50 suppliers to LHC? The importer can import any item a hotel requires. Nowadays, it has focused on the improvement of buffets, working with suppliers that the Iberostar Group traditionally works.

Will the United States Department of State authorize Bethesda, Maryland-based Marriott International (2018 revenues exceeded US$23 billion), whose subsidiary manages one property in the Republic of Cuba and will add a property in December 2019, to purchase products from LHC?

Since Gaviota S.A. owns both properties in the Republic of Cuba and Gaviota S.A. is a shareholder in LHC, are activities with LHC considered “grandfathered” and thus permitted due to shared ownership? Will LHC be permitted to import hotel products (including food products and agricultural commodities) from the United States for use exclusively at Marriott/Starwood-managed properties or for any property in the Republic of Cuba?

Since 2016, Marriott International, initially through Stamford, Connecticut-based Starwood Hotels and Resorts Worldwide LLC which was acquired by Marriott International in 2016, has managed the 186-room Four Points By Sheraton Havana in the Republic of Cuba. The property is owned by Gaviota S.A.

In March 2016, Marriott International reported that the company would manage the 83-room Hotel Inglaterra, also owned by Gaviota S.A. Subsequently, the company reported that the property would be under management in December 2017 and then in December 2019. No reason(s) have been provided for the thirty-six (36) month delay. The Hotel Inglaterra will be amongst the company's 122-property The Luxury Collection.

On 16 March 2016, the company reported signing a Letter of Intent to manage a third property, the 27-room Hotel Santa Isabel, also owned by Gaviota S.A. There has been no mention of the property by the company since the 16 March 2016 announcement.

Due to the acquisition of Starwood Hotels and Resorts Worldwide, Marriott International gained control of certified claims in the Republic of Cuba. Marriott International is now the second-largest certified claimant against the government of the Republic of Cuba.

After 116 Days Sheraton/Starwood/Marriott Finally Changes Its Mastercard Acceptance Policy For Cuba (October 20, 2016)

Marriott/Starwood Was At Risk Of Legal Action By Mastercard

Officials At Banco Central de Cuba Were Angry

Could Reason(s) Have Included Marriott/Starwood Relationship With VISA?

President & CEO Of Marriott International Is Vice Chair Of President's Export Council (PEC)

Mastercard, Central Bank, and Two U.S. Banks Said Starwood Should Authorize... What Was The Problem?

Four Points by Sheraton Havana

20 October 2016- Payment and Cancellations

"Reservations for this hotel are prepaid and there are NO REFUNDS for changes or cancellation for any guests, including SPG members. Additional charges at the Hotel must be paid in CASH or credit cards authorized for usage in Cuba (Please note-most US Based Credit Cards are NOT accepted in Cuba—check with your individual financial institution)."

10 October 2016- Payment and Cancellations

"Reservations for this hotel are prepaid and there are NO REFUNDS for changes or cancellation for any guests, including SPG members. Additional charges at the Hotel are NOT payable with US credit cards and must be paid in CASH or with non-US issued credit cards."

30 June 2016- Payment and Cancellations

“Reservations for this hotel are prepaid and there are NO REFUNDS for changes or cancellation. Additional charges at the Hotel are NOT payable with US credit cards and must be paid in CASH or with non-US issued credit cards.”

On 13 October 2016, New York-based Mastercard Worldwide informed Stamford, Connecticut-based Starwood Hotels & Resorts Worldwide (a subsidiary of Bethesda, Maryland-based Marriott International), which manages the Four Points Sheraton Havana, reported the company was incorrect in stating on its Internet site that credit cards issued in the United States were not permitted to be used at the property.

Mastercard Worldwide also informed the Central Bank of the Republic of Cuba, which responded that it was not aware of the situation, but would contact management of the Four Points Sheraton Havana.

Pompano Beach, Florida-based Stonegate Bank and San Juan, Puerto Rico-based Banco Popular of Puerto Rico, and Florida-based Natbank (although this remains unconfirmed) have authorization from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and from the Central Bank of the Republic of Cuba to have their Mastercard-branded credit cards and debit cards valid for use in the Republic of Cuba.

Mastercard has removed its restriction for the Republic of Cuba on the use of its branded products in the Republic of Cuba.

Why Did Starwood Initiate A Reservations Policy More Restrictive Than French & Spanish Competitors In Cuba? (30 June 2016)

For the Four Points By Sheraton Havana property, which commenced operations on 27 June 2016, the following statement is on its reservations portal: http://www.starwoodhotels.com/fourpoints/property/overview/index.html?language=en_US&propertyID=4531

According to Stamford, Connecticut-based Starwood Hotels & Resorts Worldwide (2015 revenues exceeded US$5.7 billion), "The current reservation policies are the result of Starwood’s assessment of market conditions. We are conscious of the issues resulting from cash requirements and the limitations on payment methods. Thus, we are working to accept as many payment methods as possible based on what has been made available under the current regulatory framework. We expect to be able to offer additional options in the near future."

When making a reservation at a property located within the Republic of Cuba using the online portal of the management company, for example Spain-based Melia Hotels International (2015 revenues exceeded US$2 billion) and France-based AccorHotels (2015 revenues exceeded US$5 billion), a reservation may be changed or cancelled and may be prepaid using a non-United States-based financial institution-issued credit/debit card, but may not (yet) be prepaid using a credit card/debit card issued by a United States-based financial institution.

Regulations Do Not Require

There are no regulations issued by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury that prevent prepayment or require prepayment, that prevent refunds for changes or cancellation. The OFAC has authorized credit cards and debit cards issued by United States-based financial institutions (including American Express, VISA, MasterCard, Discover, Diners Club, etc.) for use in the Republic of Cuba.

Are the Four Points by Sheraton Havana payment policies a reflection of requirements by Republic of Cuba government-operated Gaviota (controlled by the Revolutionary Armed Forces of the Republic of Cuba), the Central Bank of the Republic of Cuba, the Ministry of Tourism of the Republic of Cuba?

Pompano Beach, Florida-based Stonegate Bank is authorized by the OFAC and Central Bank of the Republic of Cuba to have its MasterCard credit/debit card valid for use in the Republic of Cuba. San Juan, Puerto Rico-based Banco Popular of Puerto Rico has announced plans [now operational] to have its MasterCard credit/debit card valid for use in the Republic of Cuba.

In 2016, the OFAC granted a license(s) to Starwood Hotels & Resorts Worldwide to manage properties owned by Republic of Cuba government-operated entities located in the city of Havana, Republic of Cuba. The properties are Gran Caribe-owned Hotel Inglaterra; Habaguanex-owned Hotel Santa Isabel and Hotel Quinta Avenida (re-branded as Four Points by Sheraton Havana).

Bethesda, Maryland-based Marriott International (2015 revenues exceeded US$14 billion) is acquiring Starwood Hotels & Resorts Worldwide and confirms its discussions with Republic of Cuba government-operated companies to identify property-management opportunities within the Republic of Cuba.

Economic Eye On Cuba

Trump Administration Will Not Renew Marriott OFAC License To Manage Hotels In Cuba

U.S. - Cuba Trade and Economic Council, Inc.