You might think other Caribbean tourism destinations would be ready to flip their sandals as Cuba’s tourism numbers continue to climb.
International visitors to Cuba last year rose by 13.9 percent to a record of just over 4 million, second only to the Dominican Republic (5.96 million). Meanwhile, international tourist arrivals in the Caribbean region as a whole increased 4.2 percent in 2016, according to provisional data from the Caribbean Tourism Organization. Cuban tourism officials are expecting another record year in 2017.
But some Caribbean leaders say they view the Cuban tourism juggernaut not so much as competition, but as a way to raise the profile of the entire Caribbean tourism industry.
“Cuba opening up is a fantastic thing for the Caribbean,” said St. Lucia Prime Minister Allen M. Chastanet. “It only strengthens the brand of the Caribbean. It’s more important for all of us to be strong partners. The more Jamaica grows, the more potential clients there are for St. Lucia. It’s the same with Cuba.”
During the first four months of 2017, Cuba received 2 million international visitors, putting it on track to smash last year’s record. But Jamaica also was breaking tourism records during the same period. The Gleaner newspaper reported Jamaica had a record winter season, pulling in $1 billion in tourism earnings. Overnight visitors and cruise passengers combined were up 13.6 percent compared to the 2016 winter season.
“Cuba is huge into Latin America, Europe and Canada and now even the United States of America,” Chastanet said. “There are a lot of people who haven’t come to the Caribbean, and now maybe coming to Cuba will give them the appetite to come to the rest of the Caribbean islands.”
A new International Monetary Fund study on the potential impact on the rest of the Caribbean if tourism from the United States to Cuba eventually opens up concludes that one destination’s gain isn’t necessarily another’s loss.
Currently, the United States allows U.S. travelers who fall into 12 categories, such as those making family visits to the island, on people-to-people tours or on religious or humanitarian missions, to visit Cuba. But U.S. regulations still don’t allow American travelers to make conventional tourism trips where they just lounge on the beach.
If those travel restrictions are lifted, the IMF paper says, it could result in 3 million to 5.6 million U.S. arrivals in Cuba — with most of the boost coming from new tourists to the Caribbean. Last year, visits by Cuban Americans and other U.S. travelers to Cuba totaled 614,433, a 34 percent increase.
Another recent analysis by The Boston Consulting Group estimated that even with current U.S. restrictions on travel to Cuba, as many as 2 million American travelers could visit Cuba annually by 2025. Even without the recent influx of American travelers, Cuba would still rank as the No. 2 destination in the Caribbean.
While it’s still unclear what the administration may do on Cuba travel policy, last month the Freedom to Travel to Cuba Act was reintroduced in the Senate with the support of 55 senators. It would eliminate all travel restrictions for Americans.
THE TRUMP EFFECT
Former President Barack Obama lifted some travel restrictions with Cuba and allowed the first regularly scheduled commercial flights between the United States and Cuba and the first cruises in more than a half-century to go forward under his rapprochement policy.
But it’s unclear what U.S. policy toward Cuba might be under President Donald Trump.
Trump, who has been critical of Cuba’s human rights record and political system, has said Cuba didn’t offer any concessions to the U.S. and that he wants a better deal for this country in its relationship with the island. The president has ordered a review of all of Obama’s executive orders on Cuba, and Florida Republican Sen. Marco Rubio said he expects changes in U.S.-Cuba policy at its conclusion.
More than 40 U.S. travel companies and organizations, including the American Society of Travel Agents, the National Tour Association and the United States Tour Operators Association sent a letter to Trump recently urging him not to roll back travel to Cuba. “U.S. travelers to Cuba are the best ambassadors of American society,” the letter writers said.
The recent surge in U.S. travel to Cuba, they said, has increased their revenue and allowed them to hire more American workers as well as benefited Cuba’s private sector. “We encourage your administration to take note of the wide-ranging U.S. economic benefits and prioritize economic growth and job creation in the review of U.S. policy toward Cuba,” the letter said.
U.S. hotel companies also have made it clear they are interested in Cuba as a destination, but their involvement is dependent on U.S. policy going forward. Marriott International, Hyatt, Choice Hotels and Wyndham Hotel Group were among “platinum sponsors” — the highest level of sponsorship — at the recent Latin American Hotel and Tourism Investment Conference in Havana. Hilton was a “gold sponsor.”
And just before Obama’s 2016 visit to Cuba, Starwood Hotels & Resorts, which has since merged with Marriott International, signed a management agreement to operate two Havana hotels, making it the first U.S. hospitality company in more than a century to crack the Cuban market.
The former Hotel Quinta Avenida hotel in Havana’s Miramar section was rebranded a Four Points by Sheraton and has been open since last year. After undergoing renovations, the Hotel Inglaterra was originally scheduled to open as part of Starwood’s Luxury Collection last July, but the transition has been delayed.
U.S. policy currently allows American hotel companies to sign management contracts with Cuban tourism entities but they must obtain licenses from the Treasury’s U.S. Office of Foreign Assets Control.
If the United States does at some point allow tourist travel to Cuba, the Caribbean tourism industry’s apprehensiveness is “likely unwarranted,” the IMF concluded. “The history of tourism in the region has shown that it is possible for all destinations to grow despite large changes in market shares.”
But the IMF did note that some destinations are more at risk than others if the United States were to allow unrestricted tourism travel to Cuba because so many of their current visitors come from the United States. The U.S. Virgin Islands, Puerto Rico, Turks and Caicos, The Bahamas and Cayman Islands, for example, receive more than 70 percent of their tourists from the United States.
In some ways, the U.S. restriction on tourism to Cuba may have hurt the Miami market, the IMF said. In the interim, Cuba has developed bargain-priced beach resorts that attract large numbers of Canadians.
“One could argue that the U.S. travel restrictions to Cuba have in some ways punished the Miami tourism industry by making Cuba artificially cheap for Canadian tourists (who) would have otherwise vacationed in Miami,” said the report. “Hence, a reversal in U.S. policy towards Cuba could potentially be a windfall to Miami.” As more Americans visit Cuba, the IMF said, prices there would be expected to rise.
CARIBBEAN TRAVEL CONTINUES TO GROW
Over the past 20 years, with the exception of the Bahamas, tourist arrivals throughout the Caribbean have grown, despite rapid expansion in destinations such as Cancun, the Dominican Republic and Cuba, the IMF report said.
“I don’t see Cuba as a threat, and I don’t believe the region as a whole sees Cuba as a threat,” said Grenada Prime Minister Keith Mitchell. “It’s true Cuba has been growing phenomenally in the last year or so. But what has happened in Grenada is that we also have been growing.”
Last year, Grenada — known as the Spice Island because of its exports of nutmeg, cinnamon, ginger and other spices — welcomed 144, 333 tourists, a 2.6 percent increase, and in January, tourist arrivals were up 2.7 percent over January 2016, according to the Caribbean Tourism Organization.
“Cuba being the giant that it’s going to be now can help us if we integrate our efforts in the region much more than we have done at this point,” Mitchell said. The Caribbean, he said, needs to work together to improve transportation links to the region and to join forces in marketing.
“I think it’s more important than ever that we have a Caribbean brand that we’re out promoting,” Chastanet said. “The fact is that the Caribbean is only 1.5 percent of the global tourism market.”
To confront increased competition from Cuba, the IMF also recommends that Caribbean nations diversify their marketing strategies to attract more visitors from emerging markets in Latin America and says that improving quality and reducing costs, as well as building new partnerships, would be helpful.
For years, Caribbean countries have been talking about jointly marketing the region, but egos, competitive instincts and rivalries have marred the effort and little has come of it.
“Fundamentally it’s an old problem. We must stop thinking of our countries individually. We must think of the Caribbean as a whole,” Mitchell said.
In 2015, the Caribbean Hotel & Tourism Association proposed creating a Caribbean Basin Tourism Initiative — a collaborative approach to tourism development in the region. “The biggest and most disruptive pebble to be dropped into the Caribbean pool in 50 years will arrive with the opening of travel to Cuba for United States citizens,” a CHTA position paper said.
“The discussion has gone on for decades,” said Matt Cooper, chief marketing officer for the CHTA, “but meanwhile the Caribbean has been losing market share to other warm-weather destinations.”
However, he said, the timing may finally be right for the Caribbean to come together to collaborate on boosting tourism for the entire region. The idea “built momentum” at the CARICOM (Caribbean Community) heads of state meeting in Guyana in February, he said, and there is also beginning to be “vocal support” at the prime minister level.
“There’s a lifetime worth of travel experiences in the Caribbean,” Cooper said. “There is a necessity to get outside ourselves. The voice of a collective will benefit everyone in the collective.”
Collaboration might include joint marketing campaigns, promoting Caribbean culture, selling made-in-the-Caribbean products, and personnel and destination development, he said.
Currently a number of Caribbean destinations are eager to develop the Asian market. “Cuba now has the only direct flight out of Beijing landing in the Caribbean and that is interesting to other Caribbean destinations,” Cooper said.
The next step after buy-in by various Caribbean nations would be to come up with a funding mechanism for Brand Caribbean, said Cooper, and that could take a year or two. But in the meantime, the nations of the Caribbean could come up with an interim funding model and start looking at the markets they jointly want to develop, he said.
“From our perspective, we want to engage with Cuba,” Cooper said. “If they grow, we grow.”