As Cuban tourism booms, U.S. travel companies wonder: What will Trump do?
BY MIMI WHITEFIELD
The wait in the line to exchange money at the Havana airport can stretch
for hours, reservations are a must at popular private Cuban restaurants
and tangerine and hot-pink-colored vintage cars ferrying visitors crowd
the streets around the most frequented tourist destinations.
Tourism on the island is definitely booming. Cuba welcomed a record 4
million visitors last year, a 13 percent increase over the previous year
that also was a record. And during the recent holidays the tourism
stampede showed no signs of abating.
This year, with new cruise and airline service coming on stream, could
be another record-breaker. Cuba is expecting an additional 100,000
visitors to the island in 2017, according to the Ministry of Tourism.
That is, unless President-elect Donald Trump throws a monkey wrench into
U.S. visits to this new hot market.
He has warned that unless the United States gets a better deal in its
developing relationship with Cuba and the Cuban government makes some
political concessions, he might scrap the whole normalization process
initiated by the United States and Cuba on Dec. 17, 2014.
That could jeopardize both cruise service from the United States and
regularly scheduled flights by U.S. airlines, which resumed last year,
as well as limit the number of Americans allowed to visit the island.
Under President Barack Obama, Americans who fall into 12 approved
categories, such as those making family visits or on educational or
people-to-people trips, may travel to the island. Their travel is
supposed to be purposeful, rather than a vacation toasting themselves on
Those more liberal rules meant that by mid-year 2016, visits by Cubans
living abroad — most of them residing in the U.S. — and by other U.S.
travelers to Cuba had climbed to the second and third spots among all
international visitors to the island, trailing only visitors from
Canada. From January to June, non-family visits increased from 76,183 to
136,913, and that was before the first regularly scheduled flights from
U.S. cities to Cuba in more than half a century began in August 2016.
Full-year breakouts aren't yet available for 2016, but Josefina Vidal,
Cuba's chief negotiator in talks with the United States, said recently
that the combined total of visits by Cuban Americans and other U.S.
travelers last year was 614,433, a 34 percent increase.
From Miami International Airport alone, 588,433 passengers departed for
Cuba in 2016, compared to 444,667 the previous year. Included in the
count are Cubans returning to the island after making U.S. visits.
Passengers arriving and departing for Cuba through MIA reached nearly
1.2 million last year, compared to 907,263 in 2015.
Miami is the main hub for Cuba-bound travel from the United States, but
other Florida cities, including Fort Lauderdale, Tampa and Orlando are
also competing for Cuba-bound passengers.
The U.S. Department of Transportation also has granted authority for
travel between Cuba and other U.S. cities, including Los Angeles,
Charlotte, New York, Atlanta, Newark, Chicago, Philadelphia, Minneapolis
and Houston but not all the airlines awarded flights have begun to offer
Frontier became the latest U.S. airline to join the rush to Cuba when it
inaugurated service from Los Angeles to Havana on Jan. 5. However, some
U.S. airlines flying to Cuba have already reduced the number of daily
flights to the island but not the number of destinations.
U.S. tour operators like InsightCuba are coming off their best year ever
in arranging tours to the island. The New Rochelle, New York, company
took nearly 5,000 people to Cuba in 2016. The company is proceeding full
speed ahead with new products planned for this year, but its president,
Tom Popper, says Trump's election has raised question marks.
During his recent Senate confirmation hearing, Rex Tillerson, Trump's
nominee for secretary of state, said Obama's executive orders that
allowed the opening to Cuba would be among those slated for review by
the Trump administration.
"Whatever line of business you're in, it's really hard to predict what
will happen," Popper said. "I don't see an elimination or reversal of
travel policies for Cuba, but I could foresee some changes. Eliminating
it all would be very extreme."
He said one reason for optimism is that "the new commander in chief has
also been the hotelier in chief. I think he will balance that with his
policies toward Cuba." Any change in Cuba travel policy — either
beneficial or making it more difficult to travel — would probably take
from six months to two years to impact visitors to the island, he said.
When President George W. Bush took office in January 2001, backed by a
supportive Cuban diaspora, new, more restrictive travel and remittance
policies for Cuba didn't go into effect until mid-2004.
"I don't think anyone really knows what [Trump] will or won't do. We've
been in this business for a long time and we've seen a lot of different
administrations, so if there are changes, we will adapt and adjust to
whatever the OFAC (Office of Foreign Assets Control) guidelines are and
whatever we have to do to serve our customers best," said Michael
Zuccato, a co-founder of Cuba Travel Services.
California-based CTS, which used to offer extensive charter flights to
Cuba, already is in the process of reinventing itself after the advent
of regularly scheduled flights to Cuba. It only plans to offer seasonal
and private charters and is focusing on vacation packages to Cuba as
well as offering visa services and call-center support for four
commercial airlines that are among those flying to Cuba.
Zuccato is keeping his fingers crossed. "He's a business guy, so I'm
hoping he'll act in the best interest of American business," he said.
It's not just an increase in U.S. travel that is pushing up Cuban
tourism numbers. There were also significant increases in the number of
visitors from Germany, France, Italy, England, Spain and Mexico during
the first half of last year.
A steady stream of celebrities and fashionistas — Madonna celebrated her
58th birthday by dancing on a table at an Old Havana restaurant and the
Kardashian clan filmed episodes of their reality series in Havana last
year — also is beating a path to the island.
But not everyone is a fan of Cuba's growing tourism industry.
A letter to President-elect Trump, signed by five former U.S.
ambassadors, James Cason, Everett Briggs, Elliott Abrams, José Sorzano
and Otto Reich, urged him to prohibit purchases of Cuban goods,
partnering with Cuban government entities — and tourism — in accordance
with U.S. law.
Instead of "easing the lot of the Cuban people," Obama's opening to the
island "has had the effect of giving a new economic lease on life to the
regime," they said.
While the Cuban government, and increasingly the military, does control
the hotel and tour industry in Cuba, tens of thousands of Cubans, from
private tour guides and taxi drivers, operators of private restaurants
and bed and breakfasts to those who sell services and handmade goods
have seen their incomes rise because of burgeoning tourism.
Cuba has an ambitious plan to expand its hospitality resources, but at
this point all the visitors are putting a strain on the island's
On a recent night, the Yellow Submarine, a Havana rock club, had run out
of both beer and ice, and there are periodic shortages of beer, bottled
water and other products at stores that sell products in Cuban
convertible pesos (CUCs).
As the demand for rooms increases, hotel prices have shot up. Rack
prices at some of the better Havana hotels exceed $500. On a recent
weekend, a single room at the Four Points by Sheraton Havana, which is
now managed by Starwood Hotels & Resorts, was $340 and a double room
started at $390.
Recent visitors to Cuba also say they've noticed taxi inflation. A
five-CUC ($5.75) fare several months ago is now up to 13 CUCs, said Popper.
"It's not so much the inexpensive beach destination for Canadians any
more," he said.
But Popper expects hotel prices will level out and start coming down
this year. "I'm also expecting a little bit of a cooling off from the
Obama wave" that began in early 2016, he said. "Prices became
artificially inflated because the demand was so fast and furious."
To lessen the price inflation, InsightCuba is offering a trip this year
that includes four days of people-to-people activities in Varadero
Beach, where the price of hotel accommodations is more reasonable, with
just a day trip to more expensive Havana.
Although the hotels have been overflowing during the winter season,
Popper said he expects demand will start to slow in the off-season.
While hotel accommodations are still pretty tight, "the increase in
pricing is starting to bring down demand," Zuccato said.
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Source: With Cuba tourism boom, many question if Trump will change
policy | Miami Herald -