US hotel firm Starwood signs historic Cuba deal

Starwood will be the first US firm to return to Cuba since the 1959 revolution

The deal comes just before President Barack Obama’s historic visit to Cuba (Getty)

A US hotel company has signed a deal with Cuban authorities making it the first US firm to return to the island since the 1959 socialist revolution.

Starwood agreed on Saturday to renovate and run three hotels in Havana, Cuba’s capital city.

As Cuban hotels are state owned, the groundbreaking deal will put a major US corporation directly in business with the Communist government under a special US license.

The deal comes just before President Barack Obama’s historic visit to Cuba - the first visit made by a US president for nearly 90 years.

The White House has eased travel restrictions between the US and Cuba Getty (Getty Images)

Starwood’s chief of Latin American operations, Jorge Giannattasio, said the company will invest millions to renovate and re-brand the Quinta Avenida, Santa Isabel and Inglaterra hotels.

The Quinta Avenida is owned by Gaviota, a military-run tourism conglomerate. The Santa Isabel and Inglaterra, which are run by other state agencies, will be operated as part of Starwood’s Luxury Collection brand.

The firm's plans include training and hiring new staff, refitting the hotels, improving kitchen equipment and bettering safety measures.

Starwood aim to reopen the hotels by the end of the year and will receive a fee for its branding and management services.

Cuban law puts limits on the number of Cuban workers directly hired by foreign firms, which international companies say limits the customer service they can provide.

Mr Giannattasio said he was confident Starwood would have enough control to maintain the company’s standards in Cuba, although he declined to comment on the details of the firm’s arrangement with the Cuban government.

Starwood is also involved in what may be the biggest takeover of a US firm by a Chinese company.

On Friday, Starwood called off a $12.2 billion buyout agreement with Marriott in favour of an offer from a group of investors led by the Chinese company Anbang Insurance.

Tourism in Cuba rose by almost 20 per cent last year, with nearly 80 per cent more Americans flying to the island after President Barak Obama eased travel restrictions to the country.

Numbers are expected to rise even more steeply this year with the start of as many as 110 commercial flights a day from the US.

On Tuesday, the Obama administration eased restrictions on travel to Cuba, US citizens will be allowed to travel to Cuba for "people to people" educational trips and Cuban citizens will be allowed to open US bank accounts.

Mr Obama began the process of normalizing relations with Cuba in December 2014, after more than 50 years of frozen ties between the two countries. He and Mr Castro spoke at a conference last year and shook hands, symbolizing the renewed cooperation.

Additional reporting by Associated Press