Cuba Trip Update: The role of joint ventures
March 24, 2015

On Wednesday, we spoke with a representative of the Ministry of Tourism at the all-inclusive resort Sol Palmeras.

IMG_4693Sol Palmeras was built in 1990 and was the first joint venture property in Cuba. Currently, there are 20,224 hotel rooms in Varadero with 16% of them belonging to a joint venture. The most common countries to make this arrangement are Spain (by a large margin) and France. The joint ventures are important for tourist destinations as they have a larger marketing platform than national brands, so more foreigners are aware of the product. Although, ironically, Spaniards make up only 1.7% of the tourists in Varadero. Unlike American travelers, who chose a property based on brand loyalty, Europeans and Canadians chose based on the destination and amenities, so joint ventures do not assist in attracting consumers due to franchise loyalty.

The largest tourism segment is Canada, as expected, with 38.7% of Varadero visitors being Canadian. The beach destination is dominated by the luxury tier; of the 20,224 rooms, about 17,500 of them are four or five stars. Over the next few years, another 3,000 rooms are in development to be added to the supply in Varadero.