French group to run former Mafia hotels in Cuba

HAVANA - French hotel group Accor SA has taken over management of Cuba's Riviera and Capri hotels, two notorious haunts of the Mafia in pre-revolutionary Havana, the company's representative said.

"We are very excited. Our imaginations are already hard at work. We can do many things with these two classic establishments and their nightclubs," Accor executive Eric Pyre said.

Ginger Rogers was flown to Havana as a star attraction when Mafia boss Meyer Lansky opened the Riviera and its domed casino on Havana's waterfront in 1957.

The Capri, which will get a US$15 million ($21.2 million) overhaul, was run for the mob by American actor George Raft until president Fidel Castro swept into power in a 1959 revolution that sent the gangsters running.

Accor's move is the latest indication of renewed investor confidence in the communist-run country's leisure sector after last year's replacement of the tourism minister and other top officials created uncertainty.

Spanish hotel chain Sol Melia, which operates 21 hotels on the island, said in May that revenues were up 15 per cent the first quarter and it had two more hotel projects underway.

Seventeen foreign companies handle close to half the 41,000 rooms available in Cuba, most under management and marketing agreements, but some as joint ventures.

Accor already manages Havana's Sevilla hotel, where Al Capone once rented the whole sixth floor, and a hotel at the Varadero beach resort, 140km east of the Cuban capital.

"Revenues jumped 67 per cent over the last two years at our two hotels. Business is good and we are expanding," Pyre said.

Accor, one of the four largest hotel operators in the world with about 4000 hotels, will market and manage the Riviera and Capri, and a second hotel in Varadero, for state-run Gran Caribe, bringing to five the number of hotels it has in the country.

The Portuguese company, Amorin, will finance a US$15 million renovation of the currently closed Capri, with lesser sums going to upgrade the other two hotels.

Pyre said the Cuban tourism industry was attractive to investors despite the Bush administration's tightening of restrictions on Americans traveling to the Caribbean island and US efforts to dissuade Europeans from visiting.

The tourism ministry reported arrivals up 9 per cent through April, compared with the first four months of 2004, on track toward 2.3 million visitors this year.

Tourism revenues reached US$2.3 billion last year, more than 40 per cent of Cuba's foreign exchange earnings.

"Cuba is truly unique and so are the Riviera and Capri," Pyre said, pointing to the vintage Chevrolets, Pontiacs and Buicks passing by his office window.

- REUTERS