Responding To The Rise And Rise Of Cuba’s Tourism

Pässengers of US Royal Caribbean Cruise line ship Azamara Quest walk on the gangway upon her arrival in the port of Havana, on March 31, 2017. (Photo credit: ADALBERTO ROQUE/AFP/Getty Images)

By David Jessop

News Americas, LONDON, England, Fri. May 5, 2017: When the former US President, Barack Obama, announced that he was easing travel restrictions on US citizens wishing to visit Cuba, a frisson ran through the industry in the rest of the Caribbean.

Seminars and conferences were hastily convened, papers produced, and Caribbean governments sought to understand the extent to which Cuba’s opening to the US market might divert visitors.

However, their fears were largely offset by the absence at that time of scheduled airlift from major US cities, and then as US visitor numbers grew, by capacity constraints in Havana, rapidly rising room rates, and relatively poor service levels.

Two years on, Caribbean visitor arrivals and revenues grew strongly in 2016, and as a result most concerns about competition from Cuba dissipated.

Despite this, the industry in the region would be wise to consider more closely Cuba’s development plans, which suggest that it is aware of its shortcomings, and is now moving rapidly to address them and to diversify its product.

The reason for this is that its economy is struggling and will have to rely more and more on growing the tourism product, increasing arrivals and maximizing revenue.

Although some 2016 Cuban industry forecasts had suggested that tourism growth might slow in 2017, exactly the opposite has happened, and arrivals are now surging from multiple markets.

Speaking about this recently, Cuba’s Minister of Tourism, Manuel Marrero, said that in the first quarter of 2017 visitor arrivals grew by 14 percent compared to the same period in 2016; a trend, he said, that he expected to continue throughout the summer months because of increased airlift.

The minister said that while his ministry was gratified by the increase, it was now focusing on encouraging visitors to stay for longer, as well as on providing a more diversified offering and improving service levels. He also noted the importance of the role being played by private rental properties and restaurants, which he said were creating new possibilities to cope with the steady growth in tourist arrivals.

His remarks come as articles are appearing in the state media which emphasize the economic importance of the tourism industry, and the country’s ability to grow and improve its tourism sector.

Coverage in recent months indicates a new focus on encouraging visitors to stay in provincial cities; the creation of new resorts and city centre tourism away from Havana; encouraging investment in real estate, in part alongside the 13 golf courses now under construction; offering external parties management of 100 percent Cuban-owned marinas; the creation of fishing and diving centers in protected areas; the establishment of an international equestrian club; and the construction of theme parks using the latest technology

Cuba is also focusing on new hotel developments, the remodeling of existing facilities, and creating more four and five star properties, in Havana in particular. One recent report said that the country’s hotel product is now growing at a rate of 2,400 rooms per year, a figure expected to double to 5,000 rooms per year by 2019. In addition, non-state hotels and rooms are being brought into state

marketing programs on the basis that all forms of management in the sector can participate equally.

All this is happening as the country’s tourism infrastructure is being upgraded, with many of the country’s airports, including Havana, undergoing major changes, and cruise ship docking facilities are being be expanded to meet the rapidly growing number of cruise ship arrivals.

Just as significantly given the country’s relatively low levels of repeat business, there is an emphasis on improving service levels, with new agreements recently signed to develop training exchange programs, for example with Portugal. Cuba has also said that it will regrade all of its tourist facilities following a thorough analysis of each establishment, and will do more to develop and update ‘specialized tourism’, including heritage and eco-tourism.

While any change in US policy may slow Cuba’s tourism growth, industry experts suggest that it is diversifying its markets rapidly, and has the potential to become the second most important tourist destination in Latin America after Mexico, ultimately catering for 10-12m visitors a year.

All of which suggests increased competition in the Caribbean market, and highlights the importance of plans such as that being developed by Jamaica’s Minister of Tourism, Edmund Bartlett, to develop multi-destination tourism in collaboration with Cuba and the Dominican Republic.

EDITOR’S NOTE: David Jessop is a consultant to the Caribbean Council and can be contacted at david.jessop@caribbean-council.org. Previous columns can be found at www.caribbean-council.org