Cuba Tourism One Year After Obama’s Announcement

One year after President Obama said the U.S. would reestablish diplomatic ties with Cuba and that travel to the country would soon be easier for many Americans, numerous obstacles blocking this reality remain in place despite what has seemed at times like a rapid pace of change.

Some are slowly toppling: government officials from both countries reached an agreement on Thursday to restore commercial flights between U.S. and Cuban cities, exactly one year after Obama’s announcement.

The U.S. State Department said in a statement that “this arrangement will continue to allow charter operations and establish scheduled air service, which will facilitate an increase in authorized travel, enhance traveler choices, and promote people-to-people links between the two countries.” Tourist travel to Cuba is still off limits for Americans and U.S. travelers seeking to visit must fit into one of a dozen categories outlined by the Obama Administration.

Though as the statement suggests, the ban on tourist travel is likely on the verge of collapsing and commercial flights closer to filling up with U.S. travelers. JetBlue, which has offered chartered flights from the U.S. to Cuba since 2011, said it’s “eager” to offer service from numerous U.S. cities to multiple destinations in Cuba following the state department’s announcement, and will continue operating charter flights for now.

“We will review the terms of the agreement to understand how JetBlue can expand from charter service to regularly scheduled service,” said Scott Laurence, JetBlue’s senior VP of airline planning, in a statement. “We hope the next dot on our Caribbean route map will be Havana, and possibly even other destinations in Cuba.”

United Airlines also said yesterday it “looks forward to offering service between our global gateways and Cuba as soon as we have approval to do so.”

Before this break through, both countries opening embassies this summer in Washington, D.C. and Havana, Cuba’s capital, took precedence over launching direct commercial flights, or even the thought of American hotels breaking ground in places like Santiago, Cayo Coco, or Varadero.

The 50-plus year trade embargo continues halting progress and prevents American companies from doing business in Cuba with non-Americans, but that didn’t stop Airbnb from finding a way into Cuba and giving Americans the means to book accommodations there.

“New hotels are coming online, but they’re nowhere near sufficient to keep up with current demand, never mind going forward and even the private room rentals, which take up the slack, are booked,” said Christopher Baker, who’s been to Cuba more than 100 times during the past 30 years and leads tours to the country.

“Cuba is already stretched to max capacity and U.S. operators are experiencing major delays in securing hotel space etc. It’s going to get worse before it gets better. Cuba has jacked up prices significantly. I expect further large increases next year. Most of the hotel construction is in the beach resorts, but U.S. travelers currently want to see Havana and cities close at hand.”

The embargo also hasn’t stopped Carnival Corp. from planning trips by its large ships as well as it’s service-oriented Fathom line.

Current Interest in Cuba

For Americans searching for travel to Cuba, the country now ranks 16 of all Caribbean destinations searched for so far in the fourth quarter, according to Sojern, a travel data company. Cuba moved down two spots from 14 where it was at the end of June. Still, interest remains higher than in November 2014 before the White House announcement, when Cuba was the nineteenth most popular Caribbean destination Americans searched for. Interest may also be skewed as many Americans are likely unaware of how to get to Cuba legally or if going is even a possibility.

Source: Sojern

Google searches for Cuba vacations done by Americans this year largely focused on air travel and other miscellaneous trip details. Hotel related searches represent the lowest amount of searches relative to all Cuba searches.

Source: Google Trends

Tour Operator Insights

Skift recently talked to two other U.S. tour operators leading American tours to Cuba to find out what their experiences have been like during the past year. Bob Guild, vice president of Marazul Charters, a company that leads tours and charter flights to Cuba, has 95 American groups visiting the island this month and hundreds more planned for the coming months. Collin Laverty, who heads up Cuba Educational Travel, one of the largest tour companies leading Americans to Cuba, spoke of concerns from both Cubans and Americans about the future and how the country has feverishly prepared for more droves of U.S. tourists.

Skift: With this week’s news that a commercial flights agreement has been reached, what does this mean for your business? And what does the prospect of the trade embargo completely lifting mean for you?

Guild: Our own charter flights are scheduled through the end of March/beginning of April. We use American Airlines for most of our charter flights and have tentative contracts beyond that and once airlines reach an agreement with Cuba, we think most [commercial flights] will be from Miami and a few more cities. Cuba has a remarkable number of international airports compared to other Caribbean islands.

We also think that in addition to regularly scheduled flights, charter flights will continue with those. I certainly am concerned about this though. I’m most concerned with being able to put all of our groups on regular flights or chartering additional flights ourselves, or working with our colleagues who do their own charters.

Laverty: This will depend largely on how and when the embargo is lifted, and what happens on the Cuban side before and/or after this occurs. There’s a false assumption that if the embargo is lifted that means U.S. businesses can open in Havana the next day, unlimited flights will arrive with U.S. tourists and a number of other things will change. For starters, Cuba has a very regulated process for trade and investment and companies will need to sit and negotiate deals, which often takes multiple years.

Skift: Have you noticed more American interest in your tours in the year since Obama’s announcement?

Laverty: There is certainly a sense of urgency among travelers to get to Cuba “before it changes.” This partly has to do with the belief that a political transformation from the Castro brothers to the younger generation and economic reforms over the last several years mean Cuba will look very different politically and economically in the near future.

Moreover, the Obama Administration’s modifications to U.S. policy, including an easing of travel restrictions, has people thinking the days of Americans cruising the streets of Havana and soaking up the sun on the beaches of Varadero, in masses, are coming closer.

Almost all of our clients say two things: 1) I want to be there at this very interesting moment, when Cuba is changing internally and relations with the U.S. are evolving and 2) I want to see if while it’s absent of mass consumerism, Chevrolets from the 50s roam the streets and the signs of globalism are less apparent.

The most common response I get is “I want to see if before McDonalds and Starbucks are on every corner.” We reassure them those days are still not too close, but it’s certainly a wonderful time to visit.

Judging by trip registrations and calls and emails about new projects, interest amongst Americans has remained steady. What’s been incredible is the diversity of interest, with everyone from marine biologists to high school soccer teams to sailors to businesspeople reaching out to come to Cuba for exchanges and opportunities for collaboration.

Between the opening of the U.S. Embassy in Havana, a visit by the pope, talk of the Rolling Stones performing on the island and a number of other media flash points, Cuba remains present in news feeds and sexy in the travel world.

Guild: Between January and October 2015, there was a 45% increase in groups and passengers going to Cuba under the categories Obama outlined. We’ve seen a rise in academic groups interestd in our tours. So there has certainly been increase in Cuban travel with Americans but not as significant as for those going down to visit relatives. They want to get there before there’s a McDonalds on the Malecon.

Skift: What have Cubans told you about the inevitability of more Americans visiting, either tour operators you work with there or people you meet on the street?

Guild: It’s not a new idea for us or for the Cuban people, we knew it was just bound to happen because it just makes so much sense. Cuba is the only country in the world that the U.S. has restrictions on visiting, you can visit Iraq, Syria or Afghanistan freely but not Cuba.

It’s always something we’ve talked about with our Cuban colleagues, but it went on so long we weren’t sure when it would happen. [President Bill Clinton] helped things a little but then [President George W. Bush] shut those down and now [the 2016 GOP presidential candidates] say they’ll shut it down too.

Laverty: One of the phrases of 2015 in Cuba has been “vienen los Americanos” (“the Americans are coming”) or “cuando empiecen llegar los Americanos” (“when the Americans begin to arrive”). Cubans are completely convinced that in the near future millions of Americans will visit each year and have started to plan accordingly.

New restaurants open on a regular basis and real estate prices and sales are up, especially for well-located apartments and large units that can be converted into bed and breakfasts. Many top artists who sell primarily to American collectors have recently opened beautiful studios and galleries.

Young tech entrepreneurs have started to make their innovative applications available in English, and many are now focused on the travel sector. There’s no doubt in the minds of Cubans that the “Gran Ola” (“Big Wave”) of Americans is quickly approaching.

Skift: What’s your take on the current state of Cuba’s tourism and hotel infrastructure in place?

Guild: We believe it’ll be a much more open situation in the coming months and Cubans are busy restructuring their own tourism institutions. We know we’ll be dealing with new players that we may have had contact with some years ago but hadn’t worked with more recently since we’ve only been working with three agencies.

We’ve also emphasized direct relationships with hotels because we don’t always know which agency we’ll work with. We have an idea of where they’ll be building new hotels during the next few years and [the Cuban government] is putting emphasis on private restaurants that are opening every day all over Cuba, that’s so different from even five years ago.

Hotels are a concern and staying in private homes is a concern. You can imagine the logistical difficulties of picking people up and dropping off in different locations if we’re not at a hotel. We’ve only been using casas particulares (private accommodation rentals) during the last few years. But with the announcement a year ago, there has been this huge influx of travelers from the U.S. and then there’s been additional increase in groups from Canada and Europe.

What my company has been doing is using mega yachts that hold between 40 to 50 people that take travelers to different ports around the island. The yachts provide the hotel space and we coordinate the activities when they’re in their ports of call. Several ferry boats already operate from the U.S. and Canada.

Laverty: Cuba’s infrastructure is already close to maxed out at its current annual visitor level and most likely could not support an additional 1-1.5 million American visitors, which most studies estimate. Therefore, we’ll have to see what the business climate in Cuba is as the economy reforms and if the country has built new hotels, ports, airports and water systems capable of handling more visitors. In general, however, it should lead to a large increase in business.

Cuba is an incredibly difficult country to navigate and many visitors choose it because they want to experience the best culture, history and geography it has to offer, which is challenging to do on your own. In order to see the real Cuba and avoid unpleasant surprises many travelers will rely on travel companies with the right relationships and years of experience operating in a unique country.

Nothing in Cuba seems to work the way it’s supposed to and flight delays, mechanical issues with cars and buses, hotel cancellations or “rerouting,” and double booking by guides, restaurants and other services are commonplace. A lack of reliable phone and internet service makes avoiding and dealing with those problems a challenge.

Trying to deal with these common problems on your own can take away from your experience and turn your trip into a real adventure/nightmare. Moreover, it’s a difficult society to crack and wandering aimlessly on your own will likely prove difficult to really understanding how the country works.

Skift: What challenges will Americans still meet, even as relations continue improving?

Guild: It’s still illegal for individuals from the U.S. to go to Cuba. Rental cars are precious and relatively expensive there. If you don’t have one there are busses but they’re not super reliable. It’s still hard to get a seat on a plane. Cuba is a very popular destination now considering problems happening in other parts of the world.
There’s only one U.S. bank, the Stonegate bank in Florida, that has relationship with a Cuban bank but they too are having problems with smoothly transferring money and using a credit card in Cuba remains a challenge for Americans.

Related Cuba Coverage from 2015

• What President Obama’s Cuba Speech Revealed About Travel and Diplomatic Relations
• Carnival CEO Excited by Cuba Prospects and Possible New Caribbean Itineraries
• Cuba Travel FAQs: Travel Is Easier But Tourism Is Still Restricted
• U.S. Airlines Planning More Cuba Flights As Restrictions Drop
• Current U.S. Interest in Cuba Travel Is a Trickle Rather Than a Wave
• 5 Airbnb Cuba Hosts Manage Half of the Island’s Inventory
• Marriott’s CEO on Why Now Is the Moment to Embrace Business in Cuba
• Cuba Looks for Edge Over Caribbean Rivals With Online Study of U.S. Tourists
• Cuba People-to-People Tours Are Nearing the End of Their Lifespan
• Anthony Bourdain’s New Cuba Episode Shows an Island in Transition