Cuba’s Tourism Turbulence: Can Leasing Hotels to Foreign Investors Revive the Sector?

Cuba’s tourism sector, a critical pillar of its economy, continues to struggle in 2025 amidst declining visitor numbers, reduced air connectivity, economic hardship, and infrastructural issues. In the first half of the year, Cuba received fewer than 1 million international tourists—a 25% decrease compared to the same period in 2024. This steep decline is a sharp contrast to the pre-pandemic annual peaks surpassing 4 million visitors.

Key factors behind the crisis include continued US sanctions limiting financial transactions and travel access, a decline in important source markets like Canada, Europe, and Russia, and domestic challenges such as energy shortages, supply chain disruptions, and diminishing perceptions of safety. Cuba’s hotel occupancy rates have plummeted, with some chains heavily reliant on imports to maintain operations. Power outages and deteriorating infrastructure further dampen visitors’ experiences, contributing to the drop in return visits.

In response, Cuban authorities have floated the idea of leasing state-owned hotels to foreign investors as a way to inject much-needed capital, improve service quality, and revitalize the tourism infrastructure. Such partnerships aim to reverse the downturn, attract greater international interest, and modernize a sector once renowned for its vibrant culture and hospitality. However, structural economic issues, travel restrictions, and geopolitical tensions complicate recovery prospects.

Key Points:

• Cuba’s international tourism declined 25% in early 2025, with fewer than 1 million visitors in six months.
• US sanctions, reduced flight connections, energy crises, and infrastructure problems exacerbate challenges.
• Hotel occupancy rates are critically low; supply shortages impact operations.
• Traditional markets like Canada and Europe show sharp decreases; only a few countries show modest gains.
• Leasing hotels to foreign investors is proposed as a strategy to revive and modernize the tourism sector.
• Despite efforts, Cuba faces a tough recovery ahead given economic, political, and logistical barriers.

Cuba’s tourism woes in 2025 reflect a complex intersection of internal and external factors. While leasing hotels to foreign partners could bring investment and innovation, significant efforts are necessary to restore Cuba’s reputation as a top Caribbean destination and fully recover its tourism industry.