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US Hotel Company Makes Deal With Cuba

FILE - The logo for the W Hotel, owned by Starwood Hotels & Resorts Worldwide, is seen in New York's Times Square, July 31, 2013. Starwood Hotels and Resorts is to sign a deal with Cuba since the country's 1959 revolution when Fidel Castro overthrew the island's U.S.-backed government. 

Starwood Hotels and Resorts has reached a deal with Cuba to renovate three of its deteriorating state-owned hotels, becoming the first U.S. hotel company to operate in the communist country since Fidel Castro seized the properties in his 1959 revolution.

Starwood's deal with Havana, reached the day before U.S. President Barack Obama arrives Sunday in Havana for a three-day visit, calls for the company to spend millions of dollars to bring the hotels up to its normal tourist-ready quality.

Meanwhile, Airbnb, the online U.S. lodging company, announced Sunday it will soon begin accepting reservations from around the world for visitors who want to stay in private Cuban homes linked to its network of rental properties.

As Castro assumed power in 1959, he seized the tourist industry, even for months making the Habana Hilton (in Havana) the new government headquarters.

Now, U.S. tourist traffic is increasing to Cuba. Even though U.S. tourist travel to the island nation, 145 kilometers off its southeastern shoreline is, officially still banned, Washington announced days ago that it will allow "people to people" educational trips, effectively an honor system that is unenforceable. Up to 110 daily U.S.-to-Cuba flights could start by the end of the year.

"The amount of travelers will skyrocket with direct flights," said Jorge Giannattasio, Starwood's chief of Latin America operations.

He said the three Cuban hotels - the Quinta Avenida, Santa Isabel and Inglaterra - will be opened by the end of 2016.

It is not clear, however, whether Starwood will remain an American company. It was on the verge of a $12.2 billion buyout deal with Marriott International, the U.S. hotel giant, but China's Anbang Insurance Group offered $13 billion on Friday. Marriott has until March 28 to make a counteroffer.

Some material for this report came from AP and Reuters.