Americans are not flocking to Cuba, and there's not enough infrastructure on the island to support large-scale tourism. Who could have seen this coming? Probably everyone who was paying attention.
When JetBlue flight 387 took off from Fort Lauderdale, Florida, for Cuba last August 31 — the first commercial flight to the island since 1961 — its vapor trail seemed to write history. A new beachhead in the Antilles for U.S. airlines! A long forbidden destination opened at last for U.S. tourists! Suitcases of dollars for ordinary Cubans catering to the new arrivals!
But hold the mojitos.
One month before spring break, JetBlue became the third U.S. carrier to announce cuts in service to the island. No one is pulling out, but the travel industry’s new mandate is adjusting to the reality beyond the Cuba hype. Pricey cabs, so-so infrastructure, limited internet and scalper-level hotel room rates, which reached $650 last year according to the Economist Intelligent Unit, have put off travelers. As a recent Bloomberg story put it, “Now that Cuba is Open Americans Aren’t Going.”
There’s still plenty of charm in the streets of La Habana Vieja and on all those unblemished beaches that necklace the Caribbean island. But tapping it will depend on the ability of Havana’s floundering regime not just to adapt to the disruptive global economy, but also to write a new narrative that promotes the island’s future as much as its past.
This is not the first time Cuba has tried soft power to rescue the revolution. Fidel Castro warmed to tourism, in part as a lifeline after the Soviet Union collapsed and left the island’s accounts bereft. He talked up the country’s natural beauties and its crime-free streets. Still, he was determined to control not just the levers of the industry but also the behavior of its visitors, abhorring the “tourism of casinos and prostitution.” Instead, the island’s dysfunctional economy beckoned sex tourists, while prostitution and black market dollars offered desperate Cubans a bridge to escape. Talk of tourism was revived as Cuba’s latest underwriter, Venezuela, slid into disarray. Now the normalization of ties with the U.S. (assuming Donald Trump won’t rebuild that wall) has seemingly turbocharged that prospect.
So how will the new Cuba flog its wonders to the world, and can the reform-minded Raul Castro do what his brother could not — leverage the revolution and have it, too? A lot depends on the tourists. For years, Europeans and Canadians flocked to the island for a frugal equatorial getaway, with a dollop of communist realism. Many Latin Americans went in for ideological tourism, pulled by the historical aura of an island nation that played the tropical David to the gringo Goliath. Havana became the dream stop on the lefty Elizabeth Arden circuit and a safehouse for rebels on the lam. Brazil’s Jose Dirceu, the onetime guerrilla fugitive, got his face lifted in Cuba to fool his country’s dictators. (He had less luck under democracy, and is now serving time on multiple charges of political corruption.)
For the moment, pioneering U.S. travelers seem enchanted less by a new venue for spring break than by the allure of a once blacklisted nation with last century’s automobiles and last century’s politics. One of the key attractions of Cuba today is Fidel Castro’s tomb. Visitors in search of that sepia postcard have stoked demand for private guest rooms, giving AirBnb its fastest growing market in 2015. Notwithstanding the recent pullback by U.S. airlines and travel companies, international arrivals surged 14 percent last year, according to the United Nations World Tourism Organization. In a recent Brookings Institution report, Richard Feinberg and Richard Newfarmer project arrivals to rise threefold to 10 million by 2030, as tourism’s share of annual export revenues more than triples to $10 billion.
But tourists also know that Cuba is a brand in transition, and as the legacy of Fidel fades, inevitably so too will the island’s most reliable cachet. “Today, Americans are saying, ‘I’m going to see the place before it changes’. That’s fine, but I don’t know if that will translate into return visits,” Carlos Saladrigas, a Cuban-American executive in human resources who shuttles frequently from Miami to Havana, told me.
Selling the rest of the Americas on Cuba may be just as tricky. Latin Americans once held up Castro’s Cuba as the exemplar of public health care, literacy, poverty-busting and anti-imperialist brio. Now with the region’s “pink tide” of leftists governments in retreat, neighbors in the hemisphere are as likely to see the island regime for the clapped out autocracy it is, where stifled expression trumps socialist encomiums, and Cuba’s vaunted cadre of global physicians is better known as a flying cash machine for foreign reserves. “Cuba always served the Latin American left as a political cave. From the inside, you could ignore the failure of the socialist world,” said Demetrio Magnoli, an international relations scholar at the University of Sao Paulo. “With Cuba’s decline and Fidel’s death, however, all that has changed. Cuba no longer has any geopolitical importance, and if it sank into the Caribbean it wouldn’t make a difference to the global economy,” said Magnoli. “The question now is, can Cuba normalize and still prosper?”
Cuba has plenty of splendors, urban, natural or historical. (The National Museum of Fine Arts in Havana boasts some of the finest works of Spanish colonial and contemporary Cuban art, while the capital is jeweled with stunning architecture like the Hotel Nacional and the Saratoga.) Properly managed, they could be a magnet to world travelers eager for hidden wonders. Enthusiasts even tout Cuba’s potential for medical tourism.
The island’s authorities still appear to be banking mostly on beach-bound big spenders: Only about one in five Cuban hotel rooms and just 13 percent of four- and five-star accommodations are located in the capital, Feinberg and Newfarmer reported. That predilection may trace to Cuba’s lingering siege mindset, by which foreigners were deliberately cocooned in outlying resorts, where presumably they wouldn’t pollute the revolution. Only last decade were Cubans allowed to stay in beach hotels, Feinberg and Newfarmer note.
But if the country wishes to ramp up tourism, it needs to move beyond the identity it built and nurtured during the Cold War. For that the authorities will have to hasten reforms. Though private initiative is growing, funded increasingly by dollar remittances from Cuban expatriates, state controls still weigh on the economy. Keeping two official currencies — the CUP for Cubans, the far more coveted CUC for foreigners — distorts prices, encourages a black market, and crimps trade. Curbs on the internet hamper bookings, and restrictions on foreign capital hold up investment. As for island adventures, “There’s much better food and infrastructure in the Dominican Republic,” Saladrigas said. The risk now is that the country loses the glories of the socialist revolution without attaining those of the capitalist one.
That applies even to cigars. A quarter-century ago when a new glossy called Cigar Aficionado launched its list of the world’s greatest smokes, Cuba won all the big prizes. Now Nicaragua and Honduras make some of the finest smokes, and the top award last year went to the Dominican Republic. “The other countries invested in innovation and caught up,” executive editor David Savona told me. In order to keep the island’s economy from dissipating in the smoke, Cuba will have to do the same.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Mac Margolis writes about Latin America for Bloomberg View. He was a reporter for Newsweek and is the author of “The Last New World: The Conquest of the Amazon Frontier.”
To contact the author of this story: Mac Margolis at email@example.com.
©2017 Bloomberg L.P.
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Photo Credit: Ground staff celebrate JetBlue's first flight to Cuba in August. For many airlines, including JetBlue, new Cuba routes have not been as successful as they had hoped. JetBlue Airways
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