Spanish hotel chain Meliá announced Tuesday it will cease all operations in Cuba, a move attributed to significant operational, legal, and financial challenges exacerbated by U.S. sanctions and an energy blockade.

The company stated that the difficulties have persistently affected its business environment in Cuba, and the withdrawal will be effective Friday. This decision represents a notable blow to the Caribbean nation's tourism sector, which has historically been a key driver of its economy.

Meliá's departure follows new U.S. sanctions imposed on July 13, which blacklisted Cuba's Ministry of Tourism. This ministry is a business partner for more than a dozen hotels Meliá continued to operate on the island. Previously, the chain had suspended management of 15 hotels under an agreement with a tourism agency run by GAESA, a Cuban military-business conglomerate sanctioned by the U.S. in May. With this latest move, Meliá is completely withdrawing its business from Cuba.

At one time, Meliá operated 34 five-star hotels across Cuba, with significant presences in Havana and popular tourist destinations like Varadero and the island keys. The chain held symbolic importance for Cuba's tourism industry, which began to open after the Soviet Union's collapse over 35 years ago.

U.S. measures against companies engaged in business in Cuba include asset freezes, seizure of accounts within the U.S. financial market, and travel bans for their stakeholders, investors, and employees. According to an associate professor at Augusta University, these policies are "methodically and systematically closing every source of foreign currency for the Cuban government."

The U.S. intensified pressure on Cuba following specific geopolitical events, aiming for political and economic changes on the island. An energy embargo has compounded pre-existing crises, leading to prolonged daily blackouts, shortages of medicine, strained water supply, and transportation disruptions.

Meliá's withdrawal is part of a larger trend impacting Cuba's tourism. Major chains like Iberostar and Royalton have also reduced their operations, and airlines such as World2Fly, Air France, and Iberia have canceled flights to the island. In the first quarter of the current year, Cuba experienced a 48% decline in tourism arrivals compared to the same period in 2015, with a total of just 298,000 visitors.