Cuba defends GAESA as US sanctions prompt hotel exodus
The Cuban government is defending its military-run conglomerate GAESA against US allegations of corruption and profit hoarding. Several international hotel chains including Blue Diamond and Iberostar are severing ties with sanctioned properties as a grace period for new US restrictions ends.
Cuba defended its military-run conglomerate GAESA on Tuesday afternoon as U.S. sanctions triggered an exodus of foreign hotel operators. Outside estimates suggest GAESA controls 40% to 70% of the island's economy, including most luxury tourism assets. The withdrawal of foreign partners impacts 60% of shipping traffic and tourism revenue.
The United States expanded sanctions via a May 1 executive order to include any foreign person operating in any sector of the Cuban economy. Cuban officials said GAESA is a response to the economic blockade rather than an opaque military structure. The U.S. government accuses GAESA of hoarding profits for the military elite.
