Inside Cuba, small businesses ramp up tourism offer

Inside Cuba, small businesses ramp up tourism offer
By Marc Frank
CIENFUEGOS, Cuba | Tue Jan 25, 2011 9:51am EST

Communist Cuba's recent easing of red tape for private enterprise is
improving services for tourists in provincial towns on the Caribbean
island, with hundreds of new restaurants and lodgings opening up.

"Mom-and-pop" small businesses have begun to boom in Cuban cities and
towns following reforms by President Raul Castro to boost private
enterprise and lay off state workers to improve efficiency in one of the
world's last Soviet-style economies.

In the quaint south coast port city of Cienfuegos, the number of private
restaurants has jumped from two to 16 in just a few months. There are
now more than 100 home-based 'bed and breakfast' lodgings, local
entrepreneurs say.

That is a welcome relief for visitors to the town, nestled between the
foothills of the Escambray mountains and a palm-lined bay. Both
foreigners and locals have grumbled in the past about the poor food and
accommodation on offer in the Cuban interior, away from the capital and
main tourist resorts.

Cienfuegos' 400,000 residents and wandering tourists, who last year
struggled to find refreshment in the often sweltering city, can now
choose between dozens of home-based snack outlets serving pizza,
pastries, coffee and soft drinks.

"Competition means you have to improve your service and that's a good
thing, everyone gains, you, the tourists and the country," said Orestes
Toledo, owner of the Perla Hostal, a two-room bed and breakfast.

"Now even the state will have to shape up," he added, sipping coffee on
his roof-top terrace overlooking the bay.

Cuban revolutionary leader Fidel Castro nationalized all small
businesses in 1968 and only after the collapse of longtime benefactor
the Soviet Union in 1991 begrudgingly allowed their return under tight
regulation.

But after a few years, his government stopped issuing new private
self-employment licenses that underpinned small business. Many small
businesses were strangled by red tape.

Fidel's brother, Raul Castro, became president in 2008 and has now
struck out in a different direction with plans to turn much of the
retail sector over to leasing arrangements, cooperatives and private
entrepreneurs.

Cienfuegos is 150 miles (240 km) east of Havana, near the restored
colonial town of Trinidad and a few hours from the popular Varadero
beach resort. Foreign visitors to the city usually pass through for a
day or two.

HIGH HOPES

Cienfuegos' new private entrepreneurs believe their businesses will now
steadily improve and seem to relish the challenge of more joining their
ranks.

"I think a lot of people are going to open restaurants. I calculate you
might eventually see 40 or 50 and a lot of cafes," said Tony Azorlin, a
strapping former forest ranger.

Azorlin and his wife doted over clients last week at the Ache 'paladar',
or home-based restaurant.

"I think there is a market for that many, as long as tourism holds up,"
he said. Azorlin added the sky would be the limit for local private
business if the United States lifted its ban on most Americans visiting
the island.

This ban persists under the decades-old U.S. trade embargo against Cuba,
which U.S. President Barack Obama slightly eased earlier this month, to
allow more trips by American professors and students, artists and church
groups.

Some 2.5 million foreign tourists visited Cuba last year, the government
reported.

The Ache was one of 18 'paladares' that opened in Cienfuegos in the
1990s when small family businesses were first allowed. All but two
closed over the years under ensuing over-regulation imposed by a state
loath to allow competition.

Azorlin said under rules introduced in the last few months, his taxes
were now lower. He also could have more seats, hire employees and serve
what he pleased, with beef, shrimp, lobster and potatoes no longer
banned from private restaurant menus.

At a government office in Cienfuegos issuing private business permits,
Arlina Rodriguez estimated she and colleagues had issued more than 200
licenses since Castro lifted restrictions in October, proclaiming small
business vital to the country's future.

"It hasn't stopped and doesn't appear it will any time soon," said
Rodriguez, busy dealing with eight people seeking licenses at her poorly
lit hole-in-the-wall office.

Nationwide, the government reports more than 75,000 self-employment
licenses have been granted so far.

The Ache is a quaint, upscale eatery, but right next door neighbor
Carlos Alberto is of a more ambitious breed. He has just opened the Casa
de Chango restaurant and bar, a splashier and lower-priced
establishment, operating around the clock.

Carlos Alberto said he wanted to take full advantage of new regulations
allowing him to hire labor and rent space.

"I have decided to expand and open a second Casa de Chango, and
eventually will have three, four or five," he said, insisting local
authorities and Chango, the most powerful deity in the Afro-Cuban
Santeria religion, would bless his ambition to found the first private
restaurant chain in the country. (Editing by Frank Jack Daniel and
Pascal Fletcher)

http://www.reuters.com/article/2011/01/25/uk-cuba-economy-reforms-idUSLNE70O04G20110125