Cuba in quite an impressive comeback
The Caribbean is witnessing the awakening of a real sleeping giant with considerable tourism and other economic potential that was undermined for political reasons after it became caught in the middle of superpower rivalry during the former Cold War.
However, following a welcome thaw in the frosty five-decades-long stand-off which characterized relations between the United States and Cuba, there are signs of growing American business interest in Cuba, which looks poised to further increase following a forthcoming visit to Havana by United States’ President Barrack Obama.
The rapprochement between the two countries is expected to be symbolically cemented during Mr Obama’s March 21 and 22 visit to the communist-ruled island. He will become the first sitting American president to set foot on Cuban soil in more than 80 years, following the re-establishment of diplomatic relations last year.
A further boost is in the offing for the Cuban economy, especially its expanding tourism sector, as Havana and Washington agreed earlier this week to re-establish scheduled air services. The aviation deal authorizes up to 110 American commercial flights a day, including 20 to the capital Havana.
The deal comes against the backdrop of an already impressive comeback by Cuba as a tourist destination for American travellers, thanks largely to charter flights. Three United States carriers –– American Airlines, JetBlue and United –– have so far expressed interest in operating scheduled services. Others are expected to follow.
Up to just a few years ago, Americans were barred from visiting Cuba because of a crippling United States-imposed trade embargo that was in effect for the last 50 years. However, in another sign of a warming bilateral relationship, the island last year recorded a whopping 77 per cent jump in American arrivals which totalled 161,000.
Overall, Cuba, which previously relied on the Canadian and European markets, hosted a record 3.32 million visitors in 2015, a 17.4 per cent increase over the previous year. These are developments to which Barbados tourism planners should pay close attention as there are obvious implications of competition for the local industry.
Here is an example of a possible challenge. Last year, compared with all the other Caribbean destinations, Barbados recorded the highest growth in tourism business out of the United States, which accounted for 50 per cent of the region’s total tourism business. Reviewing the 2015 performance of the region’s bread and butter industry earlier this week, the Caribbean Tourism Organization (CTO) put the increase at 27.6 per cent.
With the pending resumption of scheduled flights between the United States and Cuba, the strong possibility exists that more Americans may be tempted to visit Cuba, which is closer to home, instead of going farther south.
After being a forbidden destination for so long, what Cuba currently enjoys is a strong curiosity factor which can serve as a powerful magnet for Americans.
Until this curiosity fades, which may take quite a few years, it arguably gives Cuba an advantage over competing regional destinations. Other pull factors for American visitors are the exotic images of Cuba to which they have been exposed, including those of still-working vintage 1950s American cars on the streets of Havana, and the nostalgia related to Cuba’s reputation
as an American playground prior to the 1959 Revolution that brought Fidel Castro to power.
Barbados has to watch Cuba for another reason: obvious strong interest in Britain, which has been the mainstay market of the local tourism industry for more than a decade, translated into Cuba emerging as most popular Caribbean destination for British tourists last year.
Cuba accounted for just over a quarter or 25.2 per cent of total British visitors to the Caribbean, according to the CTO. Barbados, with 14.3 per cent, was in second spot. Britain is also the leading European market for Caribbean destinations.
In the meantime, what provides Barbados and other regional countries with some breathing space to study the impact of Cuba’s comeback are concerns about Cuba’s carrying capacity to cater to a really huge influx of visitors. There are not enough hotel rooms. However, with expected inflows of investment, these deficiencies will be addressed either through expansion
of existing plants or construction of new ones.
While we warmly welcome Cuba’s reintegration after so many years of hemispheric exclusion, we cannot at the same time afford to ignore the implications from a business perspective, especially tourism. The reality is that both Barbados and Cuba are competing in the same markets.