by Roland Leiser
A Canadian consultant on Cuba has sought to dispel the notion that investors would encounter official corruption in their negotiations to open hotels.
Gregory Biniowsky, an attorney and political science professor at the University of Havana, addressed the 5th annual Georgetown University Hotel and Lodging Legal Summit in Washington, DC Oct. 28. His firm, Gowling WLG, is based in Toronto, but he lives in Havana.
“The last thing I want to be is a Cuba cheerleader,” but the country is rated “as one of the least corrupt in Latin America” along with Chile, Uruguay and Costa Rica. Cuba’s strict code of conduct prohibits an official from even accepting a lunch from a potential investor.
“It’s not to say that there’s no corruption in Cuba; we even have it in Canada,” said Biniowsky.
Cuba hosted 3.5 million visitors last year of which one million were Canadian, he noted. For Americans, the Treasury Department restricts travel to 12 designated categories while tourism by individuals is prohibited.
He and four others participated in a panel on cross-border transactions on the last day of the two-day meeting, which attracted 272 participants.
Among other advice to potential American investors, he urged that they “pick the brains of non-U.S. companies” that have a presence in Cuba. “It’s not a huge handicap to be a U.S. firm looking to invest in hotels.” In connection with President Obama’s historic trip to Cuba last March, Marriott International received Treasury Department approval to develop partnerships with Cubans.
Business with government officials must be built on relationships and trust, Biniosky advised. A negotiator’s patience will be tested in dealing with Cubans who are “rigid and bureaucratic, but “get face time with them.” Interested businessmen, he suggested, might hold ” moot negotiations” with their Cuban counterparts, which would be “non-binding with no transaction of services.”
Other key points he made:
– The U.S. is “much closer to lifting the travel ban” than ever with the U.S. Chamber of Commerce “starting to bang on doors” and there is bipartisan support for it in Congress;
– If Hillary Clinton is elected president, the travel ban could be lifted in the first month of her administration;
– Cuba is “maxed out” with its tourism infrastructure” since it’s difficult to rent a car or find a room in a four star hotel;
– A shortage of tourism workers at all levels remains a problem for Cuba;
– In a few years, there will be a “massive boom” in tourism with “lots of hotels to build plus rental cars and food to import.”
