Cuba
Abacus has been active in the Cuban commercial property market for over 10 years, and we believe we are the only international property consultants to have a truly in-depth knowledge of the Cuban hotel and office market. We continue to carry out regular valuation and consultancy work for international investors, and our principal client is the largest international investor in real estate in Cuba, holding part-ownership of a portfolio worth around US$ 400m, comprising several 4* and 5* hotels and the leading office complex in Havana.
Cuba background:
- Cuba is a sovereign state and a founding member of the United Nations. It has currently one of the world's only planned economies, and its economy is dominated by the tourism industry and the exports of skilled labour, sugar, tobacco, and coffee. According to the Human Development Index, Cuba has high human development and is ranked the eighth highest in North America, though 72nd in the world in 2019. It also ranks highly in some metrics of national performance, including health care and education.
- Becoming the first non-Castro to lead Cuba in nearly six decades in April 2018, Miguel Díaz-Canel’s government has been busy. On 3rd July 2018, Cuba’s National Assembly endorsed a new constitution but required a popular vote to become law. On 24th February 2019, Cuban’s voted in favour of this new constitution, replacing the 1976 charter. It protects private property and foreign investment, and for the first time, places two five-year terms on the office of the presidency.
- Internationally, mainly as a result of Cuba’s deep involvement in supporting President Nicolas Maduro’s government in Venezuela, Cuba has been impacted in 2019 by the US decision to end the suspension of Title III of the Helms-Burton Act, a US federal law that enforces US embargo measures against Cuba as well as a widely identified deterrent to international companies from doing business in Cuba.
- Cuba’s” updating” of its economy and ambitious economic reforms, is still very much work in progress and has yet to significantly raise the standard of living of most Cubans.
- Alongside tourism, émigrés remittances and cuentapropistas (self-employed) are providing much-needed income into the Cuban economy. Tourism is Cuba's main source of hard-currency revenue, after the export of professional services, but unsurprisingly has been severely impacted by the COVID-19 pandemic.
- Following worldwide trends, Cuba suspended all international flights at the end of March 2020. This meant an immediate interruption to the flow of tourism to the country in the middle of the high season. Hotels operated normally in January and February. March saw a reduction in hotel occupancy to 40-50% of typical expectations for this high season month. By April 2020, all resort hotels (including Varadero) had ceased to operate, but restrictions are being lifted slowly and hotels are expected to reopen fully by 2021.