Cuba hotels slash prices, add perks as tourism collapses further

Cuba’s hotel operators are cutting prices by 25 percent or more and piling on extras, but the empty rooms are exposing a deeper collapse that is hitting workers, renters and drivers first.

Hotel occupancy fell to 18.9 percent in 2025, down from 23.0 percent the year before, while international arrivals finished the year at 1.81 million, the lowest total since 2002. The slide continued into 2026: just 298,057 tourists arrived in the first quarter, 48 percent fewer than a year earlier, and March brought only 35,561 visitors. In a country with about 80,000 hotel rooms, roughly 50,000 of them rated at least four-star, the supply is far out of step with demand.

The pressure began showing up in Cuba’s transport links. Fuel shortages and aviation disruption helped drive more than 1,700 flight cancellations and the suspension of at least 11 airlines, while Canadian carriers including Air Canada, WestJet, Sunwing and Air Transat cut or stopped Cuba service. Canada also tightened its travel warning, telling visitors to avoid non-essential travel and check flights before departure.

To keep properties from sliding further into the red, hotel chains have shifted from expansion to survival. In Varadero, where fewer open resorts are chasing a much smaller pool of guests, discounts of 25 percent or more are being pushed on early bookings and last-minute deals. In Cayo Coco and Cayo Santa María, all-inclusive operators are bundling food, drinks and activities at lower rates. Havana hotels have been adding airport transfers, room upgrades and consumption vouchers, a sign that urban properties are chasing business they can no longer take for granted.

The bigger shock has been the retrenchment itself. The government began closing hotels and moving tourists to save fuel, and Gaviota shut 20 hotels in Cayo Santa María while more than 7,000 workers were pushed out of their jobs. Meliá, which manages 35 properties in Cuba, planned temporary closures and stayed on the island, while Iberostar and Valentin Hotels & Resorts also pulled back from some properties.

For Cubans who depend on tourism, the damage reaches far beyond hotel lobbies. Fewer arrivals mean fewer fares for taxi drivers, fewer meals sold by private renters and paladares, fewer tips for musicians and fewer nights booked in homes that once filled whenever charter flights landed. Even as tourism minister Juan Carlos García Granda kept defending revival plans at FITUR 2026, the island’s resorts were already showing a more brutal truth: more perks for visitors, less stability for everyone who lives off them. Tourism still brought in about $1.3 billion in foreign currency in 2024, but the sector is now fighting to keep the lights on while the broader economy absorbs the hit.