A Once-Empty Hotel Is Now a Hub for Dealmakers Rushing to Venezuela

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It’s been less than six months since Maduro was captured and sent to New York on drug charges, and there’s still a lot of work to be done to normalize the economy, according to María Camila Hernández, the director of forensic investigations and intelligence at financial and risk advisory firm Kroll. She visited Caracas for the conference.

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“So little time has passed since everything opened up — yet things are moving fast,” she said.

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Elsewhere in Caracas, a group of about 20 foreign investors including representatives of hedge funds and mining interests huddled in private meeting rooms to discuss the outlook with entrepreneurs and analysts. Government officials, including Rodriguez, appeared by phone.

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“In the case of Venezuela, expectations have been reduced for a long time,” said Isaac Schwartz, a portfolio manager at Robotti & Co. Advisors who attended the event, organized by local consultant Orinoco Research. “But when you see the opportunity for growth, it’s very substantial.”

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The Wait

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Outside the hotel rooms and the fancy restaurants catering to oil executives, everyday Venezuelans are experiencing the change at a much slower pace. Many parts of the country are still getting hit by daily blackouts that last several hours. This month, Venezuela announced emergency measures to stabilize its grid after electricity consumption hit a nine-year high.

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The government also seems to be easing the surveillance it practiced for years to try to suppress the opposition, with fewer checkpoints and less fear an agent will snatch someone off the street.

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“The walls aren’t listening as much as they used to,” said Anibal Raul, a 68-year-old retiree who asked to be identified only with his first name because he’s still a bit worried by the potential for retaliation. He was at a supermarket packed with both local and imported products, priced at levels similar to what would be seen in the US, so only a few well-to-do shoppers strolled the aisles. 

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The Rodríguez government, with US help, is working to fight inflation by flooding the currency market with dollars to support the bolivar. That has helped keep the parallel exchange rate in check, slowing down inflation. But experts warn that the intervention is costly and, ultimately, unsustainable.

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In the meantime, shops are offering discounts to try to encourage consumption. Government institutions continue to hand out food bags to their workers, somewhat compensating for their low wages. Private estimates put the monthly cost of a basic basket for a family of five at about $690, almost three times the minimum wage.

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An AtlasIntel survey conducted for Bloomberg News in April showed 31% of respondents approved of the Rodríguez government, down from 35% in March. Social unrest has risen, with the number of street protests more than doubling in the first quarter, according to the Venezuelan Observatory of Social Conflict.

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“Everything is on stand-by,” said Maria Mercedes, a 71-year-old retiree. “We are waiting for a real change. With Trump’s help, maybe we can have a fresh start.”

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Back at the Cayena, the hotel tries to shield guests from any of the unpleasantness outside. The building doesn’t have a lobby and high walls prevent people outside from looking in. There, business travelers find gardens, a small waterfall and a restaurant with open terraces. The suites have four-poster beds, tailored upholstery and marble bathrooms.

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The hotel wasn’t designed for an economic crisis. Its owners started to build it in 2008, when high oil prices were bolstering the economy. They didn’t anticipate the collapse that would follow, said Esteban Torbar, a member of one of the two groups of partners at the hotel, all Venezuelan. After opening in 2013, the owners managed to keep the business going by being one of the few high-end offerings for wealthy visitors.

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“We had a small audience and that was enough,” Torbar said.

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—With assistance from Fabiola Zerpa and Patricia Laya.

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