Saturday, February 21, 2015

The tourist influx to Cuba is about to begin

The tourist influx to Cuba is about to begin
by Anne VanderMey @vandermy FEBRUARY 20, 2015, 8:00 AM EST

America is ready for Cuba. Are Cuban hotels ready for Americans?

Imagine booking a $4,000 weeklong vacation to an -exotic locale near the
ocean. Now imagine that when you get there, your room has no hand
towels, the air conditioning is spotty, and it's illegal to kick back by
the beach.

Welcome to Cuba, home to miles of white-sand beaches, premium tobacco,
oak-aged rum—and 50 years of a business-phobic government under a
crippling trade embargo. Thanks to new regulations the U.S. announced in
January, which among other things will eliminate the need for a special
travel license to go there, the island nation has become the world's
buzziest destination for Americans. It's also probably the only one that
won't accept most credit cards.

Cuba has long been the forbidden fruit of the American tourist. A
30-minute flight from Florida, it already draws enough people from
Canada and Europe to make it the Caribbean's third-most-popular
destination, after Puerto Rico and the Dominican Republic. Cuba gets
about 3 million visitors a year—just 90,000 of them from the U.S.

New rules have made travel to the country easier than it has been in
half a century, and President Obama has said he wants more barriers to
fall. In the Senate, Republican Jeff Flake of Arizona introduced a bill
to end the embargo outright. If that happens, the IMF has said, the
number of annual visitors to Cuba could easily double. Yet with a
shortage of high-end accommodations, what Cuba will do with all of them
is unclear.

Tour operators are already seeing a surge. Michael Zuccato of
California-based Cuba Travel Services, which operates flights to Cuba
and organizes tours for Americans, says he expects his business to
increase 50% to 200% over the next several years. Michael Sykes, founder
of Cuba Cultural Travel, has moved to secure some 10,000 rooms in
anticipation of strong demand. Pam Hoffee, a VP at Swiss travel company
Globus, predicts its Cuba travel business will triple. The main obstacle
to all that expansion? Hotel space. Jennine Cohen, managing director for
the Americas at high-end travel firm GeoEx, says it's rooms rather than
demand that's limiting growth, a challenge that she expects will worsen
in coming years as Cuba's weighty regulations hold up private development.

But, however slowly, development is coming. In downtown Havana, Swiss
luxury brand Kempinski is in negotiations to build a 200-room resort
that would be the city's most deluxe. -Sebastiaan Berger, CEO of leading
Cuba developer CEIBA Investments, says 10 to 15 hotels have a realistic
shot at being built in the next few years. And there are signs of a more
relaxed attitude toward new construction. About the same time the
country released imprisoned British businessman Stephen Purvis from a
Cuban jail after 16 months in custody on murky charges, it gave the
green light to a new $350 million golf resort (the island has only three
courses, and one of them is at Guantánamo Bay).

What really gets developers going is the possibility that the
restrictions between the U.S. and Cuba could be eliminated entirely.
Full normalization of trade relations would unleash a tourist deluge in
the country, make construction far easier, and beckon the likes of
Marriott, Hilton, and Coca-Cola, which have all expressed interest in
investing on the island.

Until then, discerning travelers and their guides still have options.
True luxury hotels on many itineraries include the Meliá Habana and the
Meliá Cohíba, run by Spanish hotel company Meliá; the Iberostar Parque
Central, also operated by a Spanish hotelier; the Hotel Saratoga, run by
state-owned company Habaguanex; and the storied Hotel Nacional de Cuba,
with stunning ocean views, though travel agents warn not to expect
ultramodern amenities at the 85-year-old stalwart. Increasingly Cubans
are also opening their homes to travelers, in bed and breakfasts called
casas particulares; some can be wonderful, but quality varies, and it's
difficult to arrive as a tour group.

What Cuba may lack in first-class amenities, it makes up for in culture,
and the years before luxury development takes off may be the best time
to go. "It's a trip for people really interested in active learning who
want to be engaged all the time," Hoffee says. "If you want to sit on
the beach and read a book, go to another island."

For CEIBA's Berger, it's a long-term play. The very adventurous will
come see the Cuba unspoiled by capitalism and frozen in time: old cars,
vintage streetscapes, and the faded glamour of a wayward egalitarian
experiment. "With all its romance, the slippage of five-star services is
being forgiven," Berger says. "That will last three or four years. Then
Cuba will have to improve."

To travel to Cuba legally under the new regulations, Americans must fall
into one of 12 categories. Some are concrete, like religious or business
trips. Other categories are less clear, including "support for the Cuban
people." Most U.S. visitors travel under the education classification,
using a subset that requires a full-time schedule of "people-to-people"
activities. That typically means going with a tour agency that will
coordinate city tours, talks with artists, and face time with locals.
Packages for tourist activities like beach- going are explicitly
forbidden. Travel may get easier soon, but in the meantime, these
agencies can get you there and back.

Source: Tourist Cuba - Fortune -

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