Cuba’s Empty Towers How Military Hotels Bankrupt a Tourist Dream
After Barack Obama’s 2015 opening, Cuba’s military poured scarce dollars into luxury hotels run by Gaviota. The Miami Herald’s Nora Gámez Torres traces how that wager enriched GAESA even as blackouts, hunger, and empty rooms turned tourism into emergency.
Havana’s Boom That Ate the Island
When Americans began streaming into Havana after 2015, the city briefly felt like it was exhaling. The island’s battered facades still flaked in the sun, but optimism—rare currency in a sanctioned economy—seemed suddenly spendable. In that moment, Cuba’s most powerful institution, the armed forces, placed a giant bet that the opening would last: funnel the country’s foreign revenue into high-end rooms, polished lobbies, and new towers built to host a future that looked, for a season, inevitable.
As Nora Gámez Torres reports for The Miami Herald, the wager ran through Gaviota S.A., the military’s tourism flagship and a subsidiary of GAESA, the armed forces’ sprawling conglomerate. In a decade, Gaviota expanded into the island’s dominant hotel and tourism group, now listing 121 hotels, along with 20 marinas, the transportation company Transgaviota, Gaviota Tours S.A., and the logistics and supply company AT Comercial. The expansion wasn’t just visible on waterfront skylines; it reshaped the country’s internal priorities. Dollars that once might have repaired an aging grid, stabilized food production, or kept clinics stocked instead poured into concrete.
The timing could hardly have been worse. The rapprochement proved short-lived, followed by new restrictions from the first Trump administration, then a global pandemic that froze air travel for nearly two years. Yet the construction continued, in part because no civilian institution could force the military to correct course. At first, it even looked brilliant: while many assumed Cuba’s tourism sector was barely profitable—given import dependence and the collapse of domestic production—Gaviota was posting returns that would make a Caribbean resort executive blink.
Confidential GAESA financial statements obtained by The Miami Herald, according to Gámez Torres, show that between January and March 2024 Gaviota achieved a 42% profit margin, nearly four times the global tourism industry average. In those three months, it earned 13.3 billion Cuban pesos on 31.6 billion in sales. Using the official state exchange rate of 24 pesos to the dollar, that translates to $554 million in earnings on $1.3 billion in sales. Even as hotel rooms went unfilled and the streets grew darker, the ledger still shone.
But profit, in this model, has a cruel geography. Gaviota’s nonrelenting expansion amid crisis helped deepen the island’s humanitarian emergency: a country of empty refrigerators and grand new hotels, blackouts and glittering lobbies, accumulating trash and rising towers. The same overinvestment that was supposed to lure visitors eventually helped repel them. Tourists hesitate when cities are dim, food is scarce, and the most basic services falter—especially when the hotel buffet cannot reliably deliver what the brochure promised.
GAESA’s Dollar Gravity
The documents described by Gámez Torres reveal a system designed to pull foreign currency toward the military and keep it there. In the first quarter of 2024, Gaviota accounted for 72% of GAESA’s 44.2 billion pesos in revenue, underscoring how central tourism remains to the armed forces’ cash flow. GAESA’s net profit margins hovered around 42% in March and August 2023, then eased to 37% by March 2024—still extraordinary in a country where ordinary life has become an improvisation.
The power is structural. The same batch of secret accounting statements, The Miami Herald reported, showed GAESA holding $18 billion in dollar assets and another 99 billion pesos—about $4.1 billion—as of March 2024, not even counting Cimex, its largest holding company. The documents suggest the military controls at least 40% of Cuba’s economy, operates with little transparency, pays no taxes on its dollar earnings, and is treated as too secret even for the government comptroller to audit. In the language of political economy, it is the state inside the state.
That internal sovereignty is amplified by the country’s monetary distortions. A tourism worker earning the monthly industry average of 5,019 pesos must buy dollars on the informal market—about 450 pesos to the dollar—to purchase goods sold in hard currency, leaving a salary worth roughly $11. The imbalance is not just arithmetic; it becomes a daily lesson in who is protected and who is expendable. As Pavel Vidal Alejandro, a Cuban economist and professor at Pontificia Javeriana University in Colombia, told the Herald, GAESA wields near-monopoly control in lucrative sectors and can “manipulate regulatory frameworks” without external auditing—conditions that “contribute to maximizing its profits.”
Foreign hotel chains help keep the engine running, while carrying much of the operational headache. A 2016 review by professors at the University of Havana found Cuban partners paid around 5% of gross income to foreign chains in fees and incentives, leaving the owner with the lion’s share. Gaviota lists contracts with at least 11 international chains, including Meliá and Iberostar, to manage 75 of its 121 hotels. Even hiring is engineered to extract: foreign firms cannot employ Cubans directly, paying salaries in hard currency to state agencies that then pay workers in pesos—another valve that keeps dollars circulating upward.
Trinidad Counts What the Towers Can’t Buy
In Trinidad, a colonial town once animated by guest rooms, pottery sales, family restaurants, taxis, and pedicabs, the collapse is intimate. “Tourism has disappeared, and that has been felt hard,” said José Conrado Rodríguez, the priest of the Church of San Francisco de Paula, in an interview reported by The Miami Herald. What vanished wasn’t just visitors; it was an ecosystem of small livelihoods. “It was a complete economy based on tourism… Now they have no means,” he said.
His parish is helping 50 families with donations, he told the Herald, and he regularly travels to Miami to buy medicine for parishioners. The church previously provided lunch for another 40, but daily blackouts made cooking impossible with appliances distributed during the early 2000s, he said. “In reality, the country has collapsed in every aspect,” he added, naming medicine, hygiene, water, food, and roads. Then came the line that lands like a verdict from the pews: “Divine punishment exists… Their hotels are empty.”
The emptiness is measurable. Economy Minister Joaquín Alonso said 1.9 million people visited Cuba in 2025, the worst year since 2003 except for the pandemic. Even at the island’s peak—more than 4 million tourists annually between 2017 and 2019—occupancy rates remained below 50%, according to official data compiled by economist Pedro Monreal, and have hovered around or below 30% since. In 2021, when excess deaths linked to the pandemic and delayed surgeries reached 55,204, the military still spent 37.6% of all state investment on hotel construction while occupancy sank to 11.4%. Last year, 37.4% of government investment went to hotels—11 times what went to healthcare and education combined—while just 2.7% went to agriculture and cattle.
Overlooking Havana, the newly built and discreetly opened Torre K rises 43 stories with 565 rooms, a $200 million statement planted beside Coppelia in Vedado. The building is, in its own way, an autobiography of the system: monumental capital, minimal accountability, and a city below that increasingly runs on candles and patience. Academic work in Tourism Management has long warned that overbuilding without maintenance and service quality erodes destinations from within; John Kavulich, of the U.S.-Cuba Trade and Economic Council, told the Herald it reminded him of the USSR model—nice openings followed by neglect until collapse.
On an island where the revolution once promised social protection, the new skyline tells a different story: power consolidating around whatever “smells of dollars,” as analyst Emilio Morales put it to the Herald, and a future that, as Sebastian Arcos of Florida International University warned, may ultimately be negotiated “with a general or a colonel.” Meanwhile, in Trinidad, the most persuasive statistic is not a profit margin. It is a kitchen that cannot cook because the lights won’t stay on.
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