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The Grand Cayman Islands Ponder the Eventual Competition
with Cuba for American Tourism Dollars

Cayman Net News, Grand Cayman, Cayman Islands McClatchy-Tribune Regional News

December 29, 2009 -- A recent Reuters news report was headlined: "US travel industry gearing up for return to Cuba," which prompts us to ask, once again, "Is our travel industry gearing up for the return of Americans to Cuba?"

According to Reuters, US tour operators held a video conference with Cuban tourism officials in Havana last week and asked them if they are ready for the "rush" of Americans if the US travel ban is lifted as proposed by legislation now under consideration in the US Congress.

Robert Whitely, president of the US Tour Operators, which together with the National Tour Association, handles 75 percent of all package tour business to the Caribbean, predicted that "at least 850,000 Americans will go to Cuba in the first year." That does not include an estimated 480,000 Americans who will go to Cuba on Caribbean cruises when US ships are allowed to dock there.

Cuba was a favourite playground for Americans in the 1950s, when the Mafia ran casinos and brothels in Havana that were closed by Castro. As Cuba veered towards communism, Washington broke off diplomatic ties, imposed trade and travel bans and Cuba's tourist trade all but disappeared for three decades. However, some 2.5 million tourists visited Cuba this year, mostly from Canada and Europe.

But whether American tourists will return to Cuba will hinge on debate in Congress, where opponents say sanctions should not be lifted until Cuba frees political prisoners and undertakes democratic reforms to its one-party state. Whist this may not be an event that our own tourism industry will have to face in 2010, surely such a change in the established order of things is inevitable sooner or later.

We have discussed in these columns on previous occasions the implications of Cuba opening up, especially from a tourism perspective and, as we head into a new year, this seems to be an opportune moment to revisit the topic, especially given the apparent heightened interest in the US travel industry.

There is no doubt that Cuba is the sleeping giant of our region and, compared to the Cayman Islands, has vast resources of raw materials, agricultural products and labour, all at greatly reduced cost in comparison to what is typical here.

Indeed, given the proximity and the historical family and other connections between Cuba and the Cayman Islands, Cuba is far more of a natural trading partner than some Central American countries that have been receiving attention in the past.

To our mind, Cuba therefore represents both an opportunity for increased trade and co-operation, as well as an eventual threat as a competitor for tourism dollars.

We have remarked on previous occasions that the Cayman Islands, along with other destinations in the region, have had a forty-year free run in the tourism stakes. Up to the early 1950s, Cuba was very much the destination of choice for a large segment of the American travel market.

Now, without any contribution from the American market to speak of, Cuba's tourism sector currently earns approximately US$2 billion a year, with half of the tourists coming from Canada, Argentina and Venezuela, and the other half from Europe, principally Italy, Germany and France. Air Canada alone runs 10 flights per week into Cuba in the summer, rising to 28 weekly flights in the winter.

The world's largest resort operator, a Spanish company, operates 24 hotels in Cuba, one quarter of the country's hotel rooms.

Jamaican tourism interests have predicted a slump in visitors from America if the US lifts its travel ban to Cuba but they are already preparing for the reopening of Cuba to US travellers. What are we doing to make similar preparations? So far as we can tell, the answer still seems to be very little, if anything.

Hotel chains in Jamaica already operate hotels in Cuba and Air Jamaica also has regular flights there, providing the potential for multi-destination tourism between Cuba and Jamaica.

Surely there will be similar opportunities for multi-destination travel between Cuba and the Cayman Islands that we need to be thinking about now rather than when our competitors have beaten us to the punch.

Clearly, we are not going to be able to compete with the initial novelty value of Cuba as a "new" vacation destination for Americans but we should be planning for the inevitable and doing our best to profit from it instead of relying on the customary knee-jerk reaction.

The tourism sector in the Cayman Islands has been facing some significant challenges in recent years and will continue to do so in the years ahead. Another strong regional competitor in the shape of Cuba is not going to make life any easier for tourism stakeholders.

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Copyright (c) 2009, Cayman Net News, Grand Cayman, Cayman Islands

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