As foreign hoteliers leave Cuba, Sunwing assesses the impact

Sunwing Vacations Group is in the process of determining next steps as foreign hotel operators leave Cuba amid looming U.S. sanctions.

“We are aware of recent reports regarding the withdrawal of certain foreign hotel operators from Cuba and are closely monitoring the situation,” the company wrote PAX in an email on Tuesday (June 2).

As previously reported, Canada’s Blue Diamond Resorts, a major foreign player in Cuba’s tourism industry for the past decade, has terminated its operations in Cuba.

The brands it once managed – notably, Blue Diamond Resorts Cuba, Blue Diamond Cuba, Royalton, Memories, Starfish, Mystique, and Resonance – will now be administered by Gaviota, a company that forms part of Grupo de Administración Empresarial S.A. (GAESA), the Cuban military conglomerate controlled by the armed forces.

The move was announced by Argentina-based tour wholesaler Sudameria Travel, and later confirmed by Duval Communication, an agency that represented Blue Diamond Resorts Cuba in Quebec.

Blue Diamond Resorts (now known as Royalton International) has not publicly confirmed the decision nor issued an official statement. PAX has contacted the company for comment.

READ MORE: Iberostar withdraws from managing 12 military-connected hotels in Cuba: report

Since entering the Cuban market in 2011, Blue Diamond (once an affiliate of Sunwing) has grown to operate 62 hotels with more than 12,900 rooms across key destinations including Varadero, Havana, Cayo Coco, Cayo Santa María, Cayo Largo del Sur, Cayo Cruz, Trinidad, and Camagüey.

The company’s exit comes as the Trump administration intensifies pressure on foreign businesses operating in Cuba.

On May 7, the U.S. State Department, following a push by Secretary Marco Rubio, officially added GAESA – the military-controlled conglomerate that dominates Cuba’s tourism sector through its Gaviota subsidiary – to its sanctions list.

As reported by CiberCuba, the action gives foreign companies and financial institutions until June 5, 2026, to terminate all business and operational relationships with GAESA and its subsidiaries—Gaviota, Gran Caribe, Cubanacán, and Islazul—or face the risk of secondary sanctions.

Spanish hotel operator Iberostar has also ended its partnership with Gaviota.

As PAX reported Monday (June 1), the move relinquishes management of 12 hotels linked to that entity.

It appears, though, that Iberostar will continue operating in Cuba through hotels partnered with other state tourism groups that are not affiliated with the military conglomerate, including Cubanacan and Gran Caribe, reports Cuban media outlet 14ymedio.

Sunwing assessing potential impact 

Sunwing Vacations Group – inclusive of Sunwing Vacations, WestJet Vacations, WestJet Vacations Québec, U.S. operator Vacation Express, SellOffVacations.com and Luxe Destination Weddings – no longer has ownership ties to Blue Diamond Resorts.

Blue Diamond is one of Sunwing's resort partners and suppliers.

Cuba is, though, one of Sunwing’s longest-standing business partners (the tour operator has been operating there for more than 20 years).

When asked for comment about Blue Diamond’s exit, Sunwing said it is actively seeking more information and clarification from its partners and suppliers in Cuba “to better understand the scope of these developments and any potential implications for our operations and customers.”

“As more information becomes available, we will assess any potential impacts to our future programming and remain committed to keeping our travel advisor partners and industry stakeholders informed of any relevant updates,” the company said.

Pressing pause on Cuba

Sunwing Vacations Group – and other companies, such as Air Canada and Air Transat – have temporarily suspended flights and vacation packages to Cuba.

On April 15, following fuel shortages in Cuba and the cancellation of all flights from Canada, Sunwing, under the WestJet Group, announced the suspension of all its Cuba vacation packages for the summer 2026 season. The measure affected operations from all Canadian airports to Varadero and Cayo Coco between June 20 and October 9.

The Government of Canada is currently warning citizens against all non-essential travel to Cuba, pointing to deepening shortages of fuel, electricity, food, water, and medicine.

Still, some tour operators, such as Enjoy Travel Group and Hola Sun Holidays, have continued to promote the destination. 

Hola Sun’s main connections to Cuba currently include flights via the United States (American Airlines, Southwest, and Delta Air Lines), Mexico City and Cancun (Aeroméxico, Viva Aerobus, and Magnicharter) and Panama (Copa Airlines).

Canada is Cuba’s largest tourism market. According to Cuban statistics, roughly 754,000 Canadians visited the island in 2025, representing a 12.4 per cent decrease from the previous year.

The downturn has intensified in 2026, with international arrivals dropping 55.8 per cent between January and April compared with the same period in 2025.

Ongoing power shortages, frequent blackouts, supply constraints, and reduced flight connectivity have prompted many hotel operators to either shut down properties or consolidate guests into a smaller number of hotels.

PAX reached out to the Cuba Tourist Board for comment on Tuesday but did not hear back by press time.

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