Cuba: No real threat to our local Tourist Industry

By Ralph Lewis

One year ago, Caymanian Times published an article titled “Cuba: The competition gets tougher. Our writer had travelled to the Cuban capital Havana to gauge the impact Cuba would have on the tourism market in the Cayman Islands particularly after President Obama’s historic actions in 2015.

President Obama made history in December 2014 when he announced his plans to re-establish a diplomatic relationship with Cuba after an embargo of more than 50 years. This unexpected announcement caught the attention of the world and in particular residents of the Cayman Islands who have been waiting on news of the “opening up” of Cuba.

The competition to attract American tourists to Caribbean islands that so heavily depend on tourism was about to get tougher; it seemed.

Six American airlines were given a tentative nod to begin scheduled flights into Cuba from several US cities, from as early as fall 2016, as part of President Barack Obama’s efforts to normalize relations with the Spanish-speaking Caribbean nation.

The announcement by US Transportation Secretary Anthony Foxx that Alaska Airlines, American Airlines, Delta Air Lines, Frontier Airlines, JetBlue Airways, Southwest Airlines, Spirit Airlines, and United Airlines have been awarded routes between Atlanta, Charlotte, Fort Lauderdale, Houston, Los Angeles, Miami, Newark, New York City, Orlando, and Tampa and Havana, came nearly one year after the diplomatic relations between the two countries were re-established.

“Today we take another important step toward delivering on President Obama’s promise to reengage Cuba,” Foxx said. 

“Restoring regular air service holds tremendous potential to reunite Cuban American families and foster education and opportunities for American businesses of all sizes.”

A dozen US airlines had applied for the chance to operate scheduled passenger and cargo service to Havana. Collectively, they applied for nearly 60 flights per day to Havana, exceeding the 20 daily flights made available by arrangement between the two governments.

This new arrangement would facilitate visits for travelers that fall under one of the 12 categories authorized by the US Department of the Treasury’s Office of Foreign Assets Control.  At the time of the signing, the administration announced that scheduled service would begin later in 2016.

Located to the south of the largest Caribbean Island and only 45 minutes in flying time to Havana, the capital, the Cayman Islands, and its residents have been paying special attention to developments in that island nation of 11 million inhabitants.  Cuba is also the only remaining communist state to receive a “very high” human development ranking from the United Nations, and ranks well in measures of health and education.

For many years stories have been told, locally, of the female attractions that have enticed male visitors to this island but if you take a visit, this myth will be cleared and Cuba will reveal the true wonders of this natural paradise that received over 4 million visitors in 2016 and expects to receive 4.1 million in 2017 according to the Cuba Business Report dated January 2017. The report also states that the four million tourists contributed $3 billion to Cuban coffers which was a 13% growth over the previous year.

Local Government officials had indicated in the past that there is no need for great concern but many in the private sector were becoming nervous about what may be ahead. For years many investors have been patiently waiting for this opportunity and have mobilized their plans to improve tourist accommodations in this Spanish speaking territory. Many hotel executives have said that they are eager to do business in Cuba and are emphasizing the proximity to the U.S., and the miles of undeveloped prime beach fronts.

Then in January 2017 Donald Trump arrived

The local Government officials were to become accurate with their speculations which some may attribute to the reign of Donald Trump as President of the United States.

In recent months, President Trump activated his plans to keep some of his campaign promises by rolling back actions aimed at normalizing diplomatic relationship with Cuba after an embargo of more than 50 years.

He announced a new Cuba policy that envisions prohibiting financial transactions between U.S. citizens and companies and Cuba’s military and intelligence services, as well as changes in regulations allowing U.S. citizens to travel to Cuba.

The partial reversal of former president Barack Obama’s opening to Cuba still must be spelled out by Treasury and Commerce department regulations not yet written.

Trump said he wants to pressure Cuban President Raúl Castro and other communist leaders to allow Cuba’s private sector, especially the country’s tourism industry, to operate more freely.

“The previous administration’s easing of travel and trade does not help the Cuban people,” Trump said. “They only enrich the Cuban regime.”

Officials in the Trump administration say that if the Cuban government releases political prisoners, grants Cubans more political and religious liberties, and allows more money to go the private sector, the United States would reconsider its current actions.

The proposed policy focuses on two of the provisions stemming from Obama and Castro’s historic agreement in 2014 to normalize relations between the United States and Cuba.

The new policy changes will not go into effect immediately. Trump’s directive will order the Treasury and Commerce departments to start writing the new regulations within 30 days.

Many of the restrictions Obama loosened will not be affected.

This will positively impact the tourist traffic as travel to the Cayman Islands is less complicated and the appeal of a safe, modern and developing nation with state of the art technology is strong.

In addition, the appeal of a well-regulated financial center is welcomed by investors who travel to these islands on a regular basis.

Cuba is still attractive to travellers from across the globe but may not see the high volumes as expected from their neighbour to the North. The new restrictions placed by the new President makes it difficult to travel to Cuba and the recent withdrawal of a few airline routes are an indication of this.

The attractiveness of this island is linked to the changing economic landscape particularly with the passing of Fidel Castro, as the tourist trade sky-rocketed but with a stifling blow from the US, this attractiveness has declined.

The Cuban infrastructure will also take many years to undo the damage of the fifty-year embargo and as many of its residents search for employment and a higher standard of living, the rural landscape may never be as attractive as that of the Cayman Islands.

Even though Cuba cannot be compared with the Cayman Islands in many areas, there are some areas of the Cuban Industry that attract tourists who may have otherwise travelled to our shores. For visitors seeking a strong cultural presence, low crime rate, rain forests, white sandy beaches, clear water and last but not least, lower prices for travel, food and accommodation, Cuba has been their choice.

Cuba also boasts high quality medical services at very low cost and many patients from neighboring Caribbean nations are steadily making their way to the north for treatment.

 Change is inevitable; however, we believe that this change will be slower than expected.

The challenge is to turn this competition into opportunity by developing partnerships that will encourage promotion of each territory’s assets. Two such areas are tourism and healthcare from which both jurisdictions may benefit as travellers may prefer a Cayman / Cuba package. With daily flights from Cuba to Cayman, travellers on board the larger air carriers will also be able to easily make a connection to our own paradise.

Our cover photo, taken in July shows the Carnival Paradise leaving Havana on a Saturday morning after an overnight visit. As the local onlookers watch the departing cruise ship, some wonder if these visits will continue to bring the much-needed tourist dollars that the country depends on.

Seeing is believing and for a low-cost airfare of approximately CI $300 on the National Airline, Cayman Airways, residents can still see history in the making as Cuba continues its transformation.