Spain's Sol Melia awaits Bush decision in Cuba

By Isabel Garcia-Zarza

HAVANA, July 3 (Reuters) - Spanish hotel chain Sol Melia , the biggest foreign player in Cuban tourism, said Tuesday it was under a ``sword of Damocles'' waiting for a U.S. decision over potential legal action against firms on the communist-run Caribbean island. But Gabriel Canaves, head of Sol Melia's Cuba operations, added he was confident the new Bush administration would follow the previous government's example in signing a 6-month waiver of the Title III of the 1996 Helms-Burton law.

The Title III clause, waived every six months by former President Bill Clinton, would allow lawsuits in U.S. courts against foreign companies alleged to be investing on property expropriated by Cuba after the 1959 revolution.

``I think common sense will prevail and that this situation, as has happened in the past, will continue suspended,'' said Canaves, whose firm's position is backed by the Spanish government and the European Union.

Still, he said Sol Melia was pressing ahead with plans to consolidate its already dominant position on the Caribbean island where it manages 20 hotels.

With the six-month waiver period up in days, President George W. Bush is under pressure from sectors of the politically powerfully and fiercely anti-Castro Cuban American community to allow application of Title III for the first time.

``You always have this sword of Damocles over you ... but our firm has made a firm bet on Cuba,'' Canaves added. ``We are not excessively worried.''

The Sol Melia executive added his firm, the 10th biggest worldwide in its sector, aimed to further consolidate its already dominant place in Cuba's fast-expanding tourism sector.

UNDER SCRUTINY IN HOLGUIN

``If in 10 years we have obtained 20 hotels, in 10 years more, we can obtain another 20 minimum,'' he said.

Sol Melia is under particular scrutiny for its Sol Rio de Mares hotel in the eastern province of Holguin, where the Cuban American Sanchez Hill family alleges the Spaniards are operating on a beach it owned before the revolution.

Canaves denied Sol Melia was at legal risk there.

``The property is Cuban, the hotel is Cuban, and we only manage the building. We have not bought any property there,'' he said. He denied some reports that the firm had been negotiating compensation or holding talks with the Sanchez Hill family.

Sol Melia is joint owner of four hotels in partnership with the Cuban government. The rest are under management contract.

The Spanish firm is due to take management of three more hotels around Cuba this year, meaning it would close 2001 with 23 installations comprising a total of 8,562 rooms.

``And we have other projects on the go. In Cuba, we are going to have a large number of hotels, it's difficult to say how many,'' Canaves added, praising Cuba's hospitality, natural beauty, and strategic position in the Caribbean as its principal advantages for tourism.

Sol Melia's financial results in Cuba were going well, he said, noting a 29.5 percent increase in revenues during the first third of the year, without giving other details.

Canaves added that Sol Melia was preparing for an eventual lifting of the U.S. embargo on Cuba, which would open the floodgates to American tourism.

Top ^