UPDATE 4-Cubans allowed to stay at tourist hotels

Mon Mar 31, 2008 10:21am EDT

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(Recasts, adds hotel manager quote)

By Marc Frank

HAVANA, March 31 (Reuters) - President Raul Castro's government lifted an unpopular ban on Cubans staying at resort hotels reserved exclusively for foreigners on Monday in a new step to ease restrictions in the communist state.

Since Raul Castro succeeded his ailing brother Fidel Castro last month, Cuba has ended restrictions on Cubans buying computers, DVD players and cellular telephones.

"Cubans can now stay at our hotels. Out doors are open to local tourism," said the Cuban manager of a small state-run hotel in colonial Old Havana.

Managers at five-star hotels run by foreign hotel chains, such as Sol Melia SOL.MC and Accor (ACCP.PA), Europe's largest hotelier, confirmed Cubans will be able to stay at any hotel if they can afford the hard currency prices.

Cubans can also rent cars and use facilities that were previously off-limits to them, including the best beaches enjoyed by foreign tourists in Varadero, Cuba's prime resort, industry sources said.

The ban on staying in hotels was a major source of frustration for Cubans since their country opened up to tourism in the early 1990s and gave rise to criticism of Cuba for having an "economic apartheid" system.

Raul Castro, 76, took over from his ailing brother Fidel Castro as Cuba's first new leader in almost half a century on Feb. 24, promising to do away with "excessive restrictions" in Cuban society and its state-run economy.

On Friday, the government announced an end to a ban on Cubans buying and using cellular telephones.

As of Tuesday, Cuban shops will be allowed to sell computers, DVD players and other appliances in a move to improve the standard of living in Cuba by opening access to consumer products.

Raul Castro has also begun restructuring agriculture to reduce bureaucratic bottlenecks and boost food production.

Until now, only newlywed Cubans on their honeymoon and workers selected for high productivity and revolutionary zeal were allowed to stay at hotels as a reward.

AVERAGE WAGE

Cubans will have to pay the going rate in hard currency to stay at luxury hotels, which few can afford in a country where the average wage is only $17 a month.

"It took a long time, but its done now. I'm going to start saving right away to go to Varadero next summer," said Martin Diaz, 34, a Havana worker.

Cubans who recalled the 1980s when they were allowed to stay at hotels and had the money to do so welcomed the end of the ban, but wondered if they could afford a hotel today.

The restrictions were introduced after the 1991 collapse of the Soviet Union forced Cuba to open up to foreign tourism and investment and legalize hard currency in the midst of a severe economic crisis.

"I don't think I can afford to go to Varadero, but I'm glad to know I have the option to do so whenever I want," said Alfredo Hernandez, a self-employed 43-year-old resident of the eastern city of Santiago.

Cuba's tourism industry is a major source of foreign exchange, more than $2 billion a year, but the number of visitors has declined in the last two years. Foreign managers said allowing Cubans to stay at tourist hotels will help raise occupancy during the low summer season.

A major public complaint that Raul Castro's government will need to deal with is that wages paid in Cuban pesos are too low, while consumer goods have to be paid for in convertible pesos, or CUCs, worth 24 times more than pesos.

About 60 percent of Cubans have access to some hard currency from cash remittances sent by relatives living abroad, mainly in the United States, or through factory and farm bonuses and tips from foreign tourists.

A class of "new rich" Cubans that has developed over the last 15 years will be the first to benefit from access to seaside hotels, computers and cellular telephone lines that cost $120, or six times the average monthly wage.

"The government is recognizing that around 15 percent of the population has 90 percent of the pesos in the banks," said a Cuban economist who asked not to be named.

"It is tempting the new rich --from farmers to black market dealers-- to exchange their pesos for CUCs to buy goods, and thus reduce the pesos in circulation and strengthen the currency," he said. (Additional reporting by Rosa Tania Valdes; editing by Philip Barbara)

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