Wednesday, August 19, 2015

Cuba's Hot Now, But It Likely Won't Be A Hot Travel Destination For Many Years

Cuba's Hot Now, But It Likely Won't Be A Hot Travel Destination For Many
Dan Reed - AUG 18, 2015 @ 1:05 PM
I write about airlines, the travel biz, and related industries

Opinions expressed by Forbes Contributors are their own.
The American Flag is flying once again over Havana, and that means that
as many as 1.8 million people will be flying annually between the island
nation and the United States…

… in 2030, maybe… but more like 2040, or even 2050.

Based on Obama Administration and State Department hype, you'd almost
expect those 1.8 million potential U.S.-Cuba air travelers to be
crouching in their running shoes, feet in starting blocks and hands on
the ground at the start line preparing to race to be the first onboard
the flights that'll soon be flying chock-a-block between Havana and
every decent-sized U.S. city. But that, as noted is the hype.

The reality is two-fold:

Despite the controversial reestablishment of formal diplomatic relations
between the two countries and the lifting of the U.S. embargo, Cuba has
not yet decided when – or even if – it once again will allow U.S.
tourists and business people to travel there on a fully, unregulated
basis. For now, travel there will be limited to government purposes and
special, carefully organized and shepherded cultural exchange tours.
No U.S. airline is chomping at the bit to fly to Havana, or any place
else on the terribly impoverished island precisely because there's
almost no existing demand for travel to and from Cuba at anything close
to profitable fare levels. And given that nation's average annual family
annual income of under $10,000, the near-total lack of business
infrastructure, and the government's continuing disdain for that would
come close to rectifying either of those problems, don't expect Cuba
travel demand numbers to rise very high or very fast.

"There are a lot more lucrative places in the US" to fly," says
outspoken aviation consult Michael Boyd, president of The Boyd Group in
Evergreen, CO.

For example, Boyd says there's significantly greater opportunities for
U.S. airlines can exploit by adding service to Golden Triangle Airport.
Never heard of it? That's understandable. It's in eastern Mississippi,
about half-way between Columbus (2012 estimated population about 23,500,
down 2,500 from the 2000 census) and Starkville (2010 census population
23,888 not counting dorm-dwelling students at Mississippi State
University). West Point (2010 census population 11,307) is the third
"city" in the triangle referenced in the name of the airport, which
boasts one 8,000-foot asphalt runway, free wi-fi, short security lines,
close-in parking, 150 seats in the terminal plus modern restrooms and
vending machines.

In a new commentary this week Boyd wrote that "there are much stronger
airline revenue opportunities at (Golden Triangle) than there are at
(Havana) – or all of Cuba, for that matter. Columbus… has what Cuba does
not have – a burgeoning manufacturing industry, a trained workforce, and
an incredible foundation of global businesses based in Japan, Israel,
France, and the Netherlands, all of which generate enormous levels of
international traffic.

"Havana? It's got the Malecón and Hemmingway's house," he added,
referring to Havana's famous coastal boulevard and park and writer
Ernest Hemmingway's pre-revolution home. "All may be quaint and
mysterious, but from an economic perspective that can deliver… air
passenger traffic, it's got bupkus." No heavy industry. No tourism
infrastructure. No trained workforce attuned to serving demanding
Americans and other Westerners. No local middle class with the money –
let alone the necessary permission from the government – to travel to
America or beyond.

To sum up the quality of opportunity that Cuba represents to U.S.
airlines, the loquacious Boyd ventured that any junior airline planning
executive who suggests offering service to Havana likely could find
himself or herself working next at the "Slurpee machine at the 7-11."

Source: Amazing Technology Allows Fans To Play Tennis With Maria
Sharapova At 2015 US Open - Forbes -

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