Skift Global Forum Preview: Carnival CEO on Bringing American Business to Cuba

On September 27 to 28, nearly 1,000 of the travel industry's brightest and best will gather in New York City for the third annual Skift Global Forum, the largest creative business gathering in the global travel industry. In only two short years it has become what media, speakers, and attendees have called the “TED Talks of travel.”

This year's event at Alice Tully Hall, Lincoln Center will feature speakers including the CEOs of Marriott International, Carnival Corp., Expedia, TripAdvisor, Etihad Aviation Group, Club Med, and many more. 

The following is part of a series of posts highlighting some of the speakers touching on big-picture issues that may begin in travel, but also impact businesses and industries beyond the sector.

Arnold Donald wasn't prepared for the feeling  of sailing into Havana's harbor on the first cruise ship from Miami to arrive in more than 50 years.

"Seeing those people lined up as the ship sailed in, just seeing the vista from the ship, that's just breathtaking and awe-inspiring," said Donald, CEO of cruise giant Carnival Corporation. "It was absolutely one of the memorable moments of my life."

The historic moment in May followed many months of intense conversations with Cuban officials as the Miami-based cruise operator sought approval to send the ship, Adonia, from its new Fathom brand. And those talks came after years of watching U.S-Cuban relations for signs of a thaw.

Carnival announced in July of 2015 that it planned to send Fathom to Cuba, but approval from the government there didn't come until March of this year. And after a brief controversy in April over whether Cuba would allow Cuban-born passengers to arrive by ship — the country ultimately allowed it — the first voyage took place on May 1.

For the cruise operator, there were bumps, and long waits, but also breakthroughs, a path that might serve as a roadmap for other American travel companies eager to navigate relationships with the Cuba.

"They wanted to do this," Donald said. "And it was very proactive, positive engagement on their part and certainly on our part."

Donald will be speaking at the Skift Global Forum on September 27. 

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Skift: What were some of the biggest challenges along the way? [There was] the controversy, and I know that got a lot of attention. Do you think that was the biggest hurdle? What were some of the other ones?

Donald: So let’s differentiate. I think from a hurdle standpoint, the biggest thing was just being open and being clear and making certain we were operating within the U.S. regulatory requirements and the Cuban regulatory requirements. The requirements were a bit of a hurdle in terms of the 12 approved forms of travel and you initially had to get a license.

Those kinds of things make it more difficult to openly market to travelers. It causes travelers consternation if you say you have to sign an affidavit, even though we have to self-certify. A number of people are still confused about what’s required to go to Cuba. If they go, what’s it really going to be like, will they have freedom to move around or not? Lots of people feel that, so those are the hurdles on that end.

In terms of getting the approval itself, again, I wouldn’t call it hurdles. It’s a process. They have a lot of things to consider on their end. We had to make certain that the U.S. felt confident we were doing things within the confines of U.S. law and regulations and it’s a process, but I wouldn’t call it a hurdle.

Skift: What do you think Cuba’s priorities have been? Obviously, they have big tours and infrastructure there now because people from all over the world have been going, but when they’re looking at opening up or U.S. citizens being able to come, what did you get a sense of that was really important to them as they’re moving forward slowly in that direction?

Donald: I think what was important to them, which I have total respect for, is they didn’t want to begin something and then have to take a step back. The embargo complicates commercial transactions, the ability to move money, the ability for people to operate in normal commerce. That’s what the intention of the embargo was and it's effective at doing that. They didn’t want to say, 'Oh yeah. Come to Cuba' but then people can’t transact, there’s no way to pay us, there’s no way for us to transact with the entities there we need to provide the guest experience.

It goes way beyond just the act of sailing there then. It’s actually conducting business and having people be able to conduct business without banks feeling like they’re going to get fined for violating U.S. law. That was the complicated part and if there was a hurdle, that was the hurdle.

Skift: Do you think there’s anything that you’ve learned, as an American company, about moving into Cuba at this stage of relations between the two countries that...is applicable to other parts of travel as more companies are also trying to start up there?

Donald: I’m not sure I want to give everybody the keys to the kingdom, but the bottom line is this: You have to listen to other people’s needs. It’s just a fundamental principle in life.… And then you have to make sure you carefully, respectfully articulate what yours are. Then you find the happy ground where everybody’s needs are met. It’s basic stuff, but so often, people go in with, 'This is how we do things,' and, 'We need this and we have to have that and that,' without really listening to the other side.

They’re expecting people to respond because it’s a logical economic decision to make or whatever. Things are multifaceted and complex always, and so you need to really be able to hear, from the other side, what really is important to them....This is very general, philosophical stuff but it’s really true and it’s a principle we operate with everywhere.

We respect everybody. We may not agree, but we agree to respect. They have certain rights and so on and so forth, and then we just try to understand what’s the real need. There are times when the needs are fundamentally so opposed or oppositional to each other and can’t be resolved, but frankly, those times are far fewer than most people would imagine.

Skift: What do you see as the big-picture potential and the opportunity there? They keep those old cars running, and that’s amazing, but there’s still a lot of infrastructure that’s not in place and there’s not widespread Wi-Fi.

Donald: Here’s my philosophy of life. You can’t map how you live and your values on everybody else. I think the opportunities are whatever the Cubans decide they're going to do. It’s their island, it’s their country. Part of everybody's interest in going to Cuba and going there soon is before it changes. There’s a certain charm to what exists in terms of architecture, in terms of lifestyle.

Of course, everybody wants all the people to do well and all of that, but in many cases, they’re already doing a lot better than us, if you gauge their health. To me, that’s the beauty of travel. You find that you have way more things in common with people who are different than you than you ever imagined, and you learn to celebrate the differences. I’m not going to sit here and presume that Cuba needs to change their infrastructure overnight and have big hotels and resorts and so on and so forth.

If that’s where they want to go, that’s cool. If they don’t want to go there, that’s cool too. You know what I mean?.…Of course, you want people to live and they do too, you want people to live in good conditions and all that. Some of the architecture, they’re never going to want to touch, even the old cars. They’re probably going to try to increase the number of old cars at some point because it’s charming. It’s attractive. Seeing those powerful, old cars going up and down the streets of Havana is unique.

I think the reality is, like you do in any travel, realize that you have way more in common than you might imagine and then learn to celebrate the differences that make it interesting, and celebrate the diversity that it represents. Infrastructure, that’s for them to decide, how fast, how much, where and how. We’re willing to participate in whatever way they want us to participate, but we go everywhere with an attitude of respect.
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