Cuba opens for US business

Cuba opens for US business
Feb 22, 2016

As the US and Cuba sign an agreement for commercial flights between the
two countries to resume after a gap of over 50 years, Sally White
wonders if the romance is over

Everyone is getting teed up for booming business seeing this as the new
money-spinner - forecasts have suggested that 10 million Americans could
go each year. So US airlines are desperate to fly, the OTAs have tweaked
their sites and US travel media have been lauding the island's
attractions. What is likely to happen next, for the moment at least
looks a right mess. For a start, tourism is still officially banned by
the US.

Too many airlines want to fly to beautiful of decrepit Havana. It seems
unlikely that the island will have enough rooms, restaurants or tour
guides to satisfy demand. Credit and debit cards are almost impossible
to use. Access to the internet is extremely limited, most connections
still being via sluggish dial-up. A dual economy is developing, with
prices for tourists soaring.

Access to the internet is extremely limited, most connections still
being via sluggish dial-up

A visa is necessary and US visitors will still have to qualify under one
of the 12 travel categories legally authorised by the US government.
These range from organising professional meetings to distributing
information to Cubans. Although, apparently, the list of exceptions has
grown so large and is so loosely enforced that the distinction from
tourism has now blurred.

Despite the travel ban, of the three and a half million international
visitors who made it to Cuba (via Europe and Canada) last year there
were 147,000 US holidaymakers, according to news agency Agencia EFE. Now
demand from the US is forecast to reach 1.5 million a year at least .

Euromonitor says that a 2008 study by the International Monetary Fund,
"to date one of the most thorough analyses of tourism demand to Cuba",
estimated that 10 million Americans would go to Cuba each year if they
were legally allowed. As it comments, if even half of that estimate
materialised, Cuba would register approximately as many inbound arrivals
as India or Australia, and more than Brazil and Argentina.

Early winners

It adds, referring to the accommodation available: "existing capacity is
reportedly insufficient for the spike in American tourists widely
expected to want to visit Cuba in light of increasingly loosening travel
restrictions".

So, early winners include Airbnb, which has capitalised on Cuba's
limited existing hotel stock with its ability to quickly add capacity by
recruiting property owners. It also has the advantage of being able to
use its peer-to-peer positioning by marketing to travellers visiting for
'people-to-people' reasons, the broadest class of travel approved by the
US government.

There is no doubt of US interest in visiting Cuba, which is just 90
miles off the Florida coast.

About a third of our members currently offer programs to Cuba, and of
that number, more than half plan to increase travel programs within the
next few years

US Tour Operators Association

"About a third of our members currently offer programs to Cuba, and of
that number, more than half plan to increase travel programs within the
next few years. And of our members who don't currently offer Cuba, 39%
plan to add it to their roster in the next few years," announced the US
Tour Operators Association.

According to reports on CNN news channels, several US airlines,
including American, Delta, United and JetBlue, are interested in
offering direct flights. The US State Department reckons that this could
lead to around 110 new flights and a bidding war for the 20 or so Havana
slots is predicted.

There will be up to 10 flights each allowed on routes to Cuba's nine
other international airports, according to a Reuters interview with
Thomas Engle, the US deputy assistant secretary for Transportation Affairs.

Most of these destinations are less popular, according to
Airwaysnews.com. But the beach resort area around Varadero has regular
scheduled flights from carriers such as Air Berlin, Air Canada, German
carrier Condor and Canada's WestJet.

The US-based airline, Havana Air, claims to be the first carrier to
launch a fully automated air reservation system for direct flight
bookings to Cuba. Its website allows users to book and pay for flights
and submit all the necessary authorisation forms for a Cuba visa.

Cuba Travel Network, an online business founded in 2002 by a Dutch
specialist Eddie Lubbers, has been selling Cuban hotels rooms for years
to visitors from Canada, Europe and other nations. Not only flights to
Cuba, but also flights within the island are offered as well as booking
for transport and meals. It plans to open a US office this year to
serve the growing number of Americans expected.

Lubbers told The Cuba Standard Monthly newspaper that his company
handled about 65,000 customers in 2013, 74,000 in 2014, 100,000 last
year and hoped to reach 125,000 in 2016. His net revenues are around
$20 million. "Our goal is to provide individual itineraries across Cuba
and to book the whole thing," he says.

Another full-service boutique tour operator, is Havana VIP Tours, not
only handling flight and bookings but the itinerary to qualify for a
visa. This could anything from dance workshops to cooking.

Cruise companies are already plying a busy trade and at least 14 big
ships are expected to make a total of 90 port visits. A local Havana
School of Tourism forecast is for around 600,000 cruise visitors
annually. MSC Cruises announced that it would be basing a cruise ship in
Cuba starting last December, Carnival Cruises has announced intentions
of offering a 'culturally-themed' cruise starting in May, and Norwegian
Cruises and Royal Caribbean are showing similar interest.

Already, under the weight of so many tourists, Cuba is changing and
visitors now complain that it is losing its charm. Prices at many hotels
have doubled to more than $300 per night, according to CBS News, and the
city is rushing to build more rooms to meet the new demand. Ironically,
as builders repair the crumbling grandeur of so many Havana streets to
take in tourists, the romantic Cuba that attracted them is disappearing

Source: Cuba opens for US business | Travel Industry News & Conferences
- EyeforTravel -
http://www.eyefortravel.com/distribution-strategies/cuba-opens-us-business