US sanctions trigger mass hotel chain exits and tourism collapse in Cuba

The Trump administration issued an executive order on May 1, 2026 that threatens secondary sanctions against foreign companies that do business with Cuba’s military‑run conglomerate GAESA. Companies were given a June 5 deadline to sever ties, or face asset freezes and visa bans.

Within days, major hotel operators pulled out of the island. Spanish chains Meliá and Iberostar abandoned 15 and 12 hotels respectively, Canadian Blue Diamond withdrew from 15 properties, Indonesia’s Archipelago International exited its contracts, and other operators such as Cosmos Hotel Group (Russia) and Axel Hotels (Catalonia) halted reservations. A bank that processed Visa and Mastercard transactions also left, prompting Cuba’s central bank to suspend card payments. Airlines including Sunwing, WestJet, Air Transat and Air Canada suspended flights.

The exodus has deepened Cuba’s economic crisis. Tourist arrivals fell 44 % year‑on‑year, with only 328,608 visitors recorded between January and April 2026. Fuel shortages, power outages and rising black‑market gasoline prices have further crippled the sector. Cuban officials say the island remains “resilient” and will honor existing reservations, but the loss of foreign management and revenue is expected to raise unemployment and strain public finances.