UPDATE 4-Cubans allowed to stay at tourist hotels

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)