Two of Spain's largest hotel groups, Meliá Hotels International and Iberostar, have effectively ended their operations in Cuba, yielding to the pressure of US sanctions that target the military conglomerate Gaesa. The withdrawals mark a significant retreat from the island by European tourism operators and underscore the deepening economic isolation of Cuba under renewed American restrictions.
Meliá and Iberostar Pull Out
Meliá, headquartered in Palma de Mallorca, informed Spain's National Securities Market Commission (CNMV) on Wednesday that it was immediately halting the management, marketing, and use of its brands at 15 hotels in Cuba. The company acted through its Portuguese subsidiary Ilha Bela, having notified the property owners on 26 May. Meliá was the last major international operator with a substantial footprint on the island.
Iberostar had already taken the same step, ceasing operations at 12 hotels as of 1 June. The chain, also based in Mallorca, formally ended all contractual ties with properties managed by Gaviota Tourism Group, Gaesa's operational arm. Iberostar will retain a presence only in hotels linked to entities not covered by the sanctions. Neither group officially cited US pressure as the reason, though Iberostar described its decision as part of "a process of adapting to the international regulatory environment and aimed at preserving the standards of quality, compliance and management that characterise the company."
The Trump administration had set 5 June as the deadline for foreign companies to sever business relationships with Gaesa and its subsidiaries. The sanctions target any entity providing funds or services to individuals designated by Washington, including Gaesa's director, military officer Ana Guillermina Lastres. The measures extend beyond tourism to sectors such as energy, defence, mining, and financial services.
Legal Risks Outweigh Economic Exposure
For Meliá, the decision was driven more by legal exposure than by immediate financial losses. Most of its 15 affected hotels had been closed for months due to Cuba's severe energy crisis. The Escarrer family's company has previously clashed with US authorities over its Cuban operations, making compliance a priority to avoid penalties or litigation.
The Spanish groups are not alone in their retreat. Canadian chain Blue Diamond had earlier announced it was ending its management of 62 properties on the island. The exodus of international hoteliers reflects a broader collapse in Cuban tourism, which has been in free fall for years.
Tourism in Free Fall
Between January and April 2026, Cuba received just 328,608 international tourists, a drop of 55.8% compared with the same period in 2025. Arrivals had already fallen to historic lows in 2025, with 1.8 million visitors—less than half the 2018 figure. All indications point to an even worse performance this year.
At least 11 airlines have suspended or reduced flights to Cuba so far in 2026, with more than 1,700 flights cancelled. Iberia has suspended its Madrid-Havana route until 24 October. Meliá had already closed 50% of its capacity on the island during the first quarter, with an average occupancy rate of just 34.1% and a 68% collapse in net profits.
The situation in Cuba stands in stark contrast to other holiday destinations. For example, Europe's holiday rental market shows a wide price divide, with the Balkans offering stays under €40 while Monaco and Iceland exceed €200, highlighting the varied fortunes of tourism sectors across the continent.
Broader Implications for European Business
The Spanish hotel groups' exit from Cuba illustrates the growing extraterritorial reach of US sanctions, which increasingly force European companies to choose between lucrative markets and compliance with American law. The moves also reflect the fragility of Cuba's economy, heavily dependent on tourism and remittances, and the limited room for manoeuvre left for foreign investors.
For European travellers, the withdrawal of major chains like Meliá and Iberostar means fewer familiar options on the island, though the broader decline in tourism may also reduce prices for those still willing to visit. The story is a reminder of how geopolitical tensions can reshape travel and business landscapes, even for companies based thousands of kilometres away.
