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Concerned Caribbean tourism officials prepare for future U.S. opening to Cuba
CubaNews / April 2011

By Larry Luxner

Given the current mood in U.S.-Cuba relations, a complete lifting of the travel ban to Cuba is still a long way off. But when it happens, more than a million Americans might hop on planes or cruise ships to Havana — leaving Caribbean tourism officials to wonder what that might mean to their own bottom line.

According to Cuba’s Oficina Nacional de Estadísticas, the island received a record 296,222 foreign tourists in January 2011, a 15.9% jump from January 2010 arrivals, and 33.9% higher than the number who came in January 2007.

For now, a small percentage of those were Americans, since U.S. citizens are still banned from spending money in Cuba as tourists.

John Issa, chairman of SuperClubs resorts, told CubaNews from Montego Bay that major resorts in Jamaica and other islands are monitoring the Cuba situation closely.

“What’s happened so far with the easing of travel to Cuba won’t have any effect on the Caribbean because it’s all related to exiles, organizations or study groups. But when relations between Cuba and the United States are normalized, it’s bound to affect the region. We need to hope that it happens at a time when the world economy is prospering and travel is growing.”

Issa added: “The supply will always be there despite market conditions, so what we really need is an expansion of demand — like the Chinese coming in large numbers to the Caribbean.

“Cuba will be just another factor to take into account. If Cuba opened up this coming winter, the rooms the Americans would occupy are currently occupied by Europeans and Canadians. So they’d have to find somewhere else to go.”

SuperClubs has 5,000 rooms in 20 properties throughout the Caribbean, including three all-inclusive hotels in Cuba: the 270-room Breezes Varadero, the 396-room Breezes Bella Costa (also in Varadero) and the 240-room Breezes Jibacoa.

Last month, officials of Cuba, Jamaica and the Cayman Islands met during the Miami International Boat Show to draft a strategy to handle the predicted influx of pleasure boats heading south once the travel ban ends.

U.S. Coast Guard figures show that at least 600,000 boats in Florida alone are capable of making the 90-mile sea voyage to Cuba. The concern is that opening a floodgate of vessels may rapidly inundate Cuba’s few marinas.

The representatives — Commodore José Miguel Díaz Escrich of Cuba’s Marinas y Náuticas Marlin SA, Dale Westin of the Port Authority of Jamaica and Neville Scott of the Cayman Islands — say any relaxation of the U.S. travel ban to Cuba would effectively create a new Caribbean cruising ground encompassing the three countries.

The three officials also agreed to form a Caribbean Marine Trades Association that would serve as an umbrella group to promote yachting tourism to the Central and Western Caribbean.

Today, the Eastern Caribbean — consisting of the U.S. and British Virgin Islands, Puerto Rico, the Bahamas and smaller islands south to Trinidad & Tobago — is far more significant when it comes to yachting.

Lisa Hamilton, president of the USVI Hotel & Tourism Association, said she’s not especially worried that the Virgin Islands will suffer once U.S. tourists flock to Cuba.

“This Cuba opening has been talked about for years,” she said. “There might be some impact on our demand, but we have a very distinct market — the U.S. Northeast — that will continue to be loyal to the Virgin Islands.”

Mario Gonzalez, executive director of the Puerto Rico Tourism Company, feels much the same way.

“The opening of Cuba to the U.S. market for tourism will have an impact on the number of visitors we’ll receive in Puerto Rico. However, that impact won’t be as harsh as some may perceive — no more than 50,000 the first year,” said González, citing a study done on that specific possibility.

“You need to conduct studies based on supply currently available in Cuba, rather than how many people will want to go,” he said.

“The important thing isn’t only the number of people who come to your island, but the quality of customers and what type of expenditures they make. With the development of the high-end luxury market, we’ll be attracting a specific segment of the market that would not come to Puerto Rico if not for the brands and flags being developed.”

PRTC’s González added: “Puerto Rico is not any less exotic because we’re under the U.S. flag. The fact that Cuba has been a forbidden place for U.S. citizens is of course an attraction. But that by itself doesn’t mean we will lose a big chunk of market share.”

Jamaican Tourism Minister Edmund Bartlett told CubaNews that he’s not too worried about the travel ban’s eventual demise.

“English-speaking tourists are far more comfortable with English-speaking destinations,” he said during a recent visit to Wash-ington. “When there is a choice of similar products, invariably the destination with the same language gets the benefit of the doubt.”

He added that Jamaica enjoys the highest rate of return visitors in the Caribbean — 42%.

“The loyalty factor is huge,” said Bartlett. “You go to any beach in Jamaica today, and I assure you that one out of every two people you talk to has been to Jamaica at least once before. I have America, the world’s largest market, at my doorstep. There are so many gateways we have not yet opened.”

Rafael Romeu, author of an IMF study on that subject, suggested that Cuba’s opening will prove a mixed bag for nearby islands.

“They would gain from redirected Canadians and Europeans who now vacation in Cuba,” he says. “But heavily U.S.-dependent destinations that do not have the ability to capture redirected Canadians and Europeans displaced by U.S. tourists will lose. Some of the most vulnerable include the Turks & Caicos Islands, the U.S. Virgin Islands, Cancún and perhaps Jamaica.”

I. Nelson Rose, one of the world’s top experts on gambling law, predicts Cuba will have casinos within the next 10 years.

“The initial breakthrough will probably take place on cruise ships, with casinos, returning to the Port of Havana,” he wrote in RGT Online, a gambling site. “Initially, gaming will only be permitted on the high seas. But it is a short step from there to allowing casinos to be open while ships are docked.”

Rose said it’s relatively easy to distinguish the increasingly popular bingo devices from true slot machines, at least for political cover.

“True casinos, with true slots and table games, are common in much of Central and South America, but even more so in the Caribbean. A free Cuba will quickly allow casinos to reopen in high-quality hotels designed for — and possibly even limited to — tourists.”

Asked about future competition from Havana, Michele Paige, executive director of the Florida-Caribbean Cruise Association, said the Cuba factor could cut either way.

“There’s a lot of pent-up demand for Cuba, and as cruise executives we’re excited about the prospect,” she said. “Once Cuba opens up and as soon as it’s feasible, the cruise industry will be there. We’re very successful at taking passengers where they want to go.”

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