The world continues being plagued by the growing contagion of the COVID-19 virus. The outbreaks continue everywhere, also in Cuba. Its negative impact is the worst since the birth of mass tourism in the 1950s. Traveling, especially for leisure and recreation, was already an important need for a great many human beings, but it is shown that it is dispensable if their lives are at stake.
Tourism is the social phenomenon hardest hit by the pandemic. In its case it acts as a natural “vector”; that must be understood and it must be treated accordingly. The problem is that it has developed a group of service industries that, in 2018, made up 10.4% of the world GDP, and approximately 1 in 10 jobs in the world; and today they are almost totally paralyzed. These service businesses account for one in ten jobs worldwide. There are tens of millions of unemployed workers, a situation close to unsustainable.
In the structure of the current economy, services are 63% of the GDP and are 80% in the United States. According to economist Joseph Stiglitz, it was what saved capitalism in the 20th century and continues to do so today. Tourism services are the ones that are growing the most. It is the natural tendency of development, but also of the model of permanent growth at all costs and at all costs imposed by capital and that planet Earth refuses to accept, unless a way to do it is found by stopping the ecological damage and, more importantly still, healing what’s already done.
The current economic crisis is the most serious since the so-called Great Recession of the 1930s.
In the case of Cuba, more than 90% of the people who visit us do so for leisure. For those of us who work in what has been called the tourism sector, we must remember that tourism is, essentially, a social phenomenon of beauty and humanity that must be preserved and perfected, as it contributes tremendously to human improvement, to understanding between peoples.
It is also a business, and has to provide economic benefits based on the quality of the offer and services.
We are now waiting for what will happen with the elections in the United States. The Democratic formula of Joe Biden-Kamala Harris and the current president, Donald Trump, whose re-election would mean a step backwards in the possibility of humanity’s survival, are competing for the presidency, it’s as simple as that.
For tourism and travel it would be a serious impact in particular. The U.S. market is made up of two main segments. The first are Cubans residing in the United States and their relatives (Cuban-Americans). The second refers to the rest of the visitors who come from that country and who visit us for various reasons, covered by the 12 licenses authorized by the U.S. Department of the Treasury, who in the jargon of the sector are called “Americans.”
A change to a Democratic president would surely mean an improvement in bilateral relations, including travel. The United States is the most important potential market for Cuba, but for the U.S. segment it will continue to be a “second-rate” market as long as the embargo/blockade laws remain in force. These visitors can only come using licenses that define in detail what they can do in our country, since the concept of “tourism” is codified in the embargo/blockade laws as an illegal act for those who visit Cuba from the U.S.
It’s necessary to give specific data to have an objective idea of this market segment. Even during the Trump administration, they are important figures for the travel industry in Cuba.
Cubans in U.S.
The data on the entry of Cuban-Americans for the last two years are exact, for the previous years they are estimated using the proportion of the two known years.
In 2017 and 2018, the total number of visitors from the United States, that is, Americans and Cuban-Americans, exceeded one million. In 2018 it even surpassed Canada.
U.S. visitors peaked in 2018. The toughest travel measures in Trump’s second year took effect last year, but even so they exceeded 400,000 visitors. Not bad for a “second-rate” market, although the vast majority came on cruise ships and, therefore, did not stay on the island.
The table reflects the radical change in the U.S. visitor operation between 2015 and 2018. Cruise arrivals reached 53% of the total in 2018, which means that only 300,000 visitors arrived by air and stayed in accommodations in the country. There is a significant decrease compared to the previous year: 445,000 fewer people who stayed in accommodations on the island. Cuba’s income per cruise passenger does not exceed USD 100, while a stay can exceed USD 1,000. This meant millions less income for the country, whether in private or state accommodations. The most affected sector was the private sector, since 80% of Americans who come to Cuba stay in private homes (according to the author’s calculations).
But the impact extended to the rest of the markets. The slight growth in 2018 was only in cruise passengers, since those who came by air actually decreased by more than 230,000 compared to 2017.
This is the result of the introduction of the cruise product in the Cuba destination. It means that a new travel offer is now included in all major source markets. In the case of Germany, for example,20% of tourists came on cruises in 2018 (according to a lecture by the minister of tourism at the Faculty of Tourism, January 2019), which made for a decrease in absolute terms in the number that came by air and stayed in the country.
I’m not, per se, against cruises, only that it’s necessary to understand what they mean and assess how much they commercially and economically represent as a benefit or harm.
To all the above, it must be added that Americans who stay in the country are prohibited from going to several of the sun and beach tourist destinations, they have serious restrictions to stay in state-owned hotels, the type of accommodation for which the country receives the highest income, forcing the majority, 80%, to stay in private homes.
A Biden-Harris administration should restore what Obama did, according to the statements of the Democratic formula. In essence: several of the 12 travel licenses made “general”—which significantly expands the number of Americans who can visit Cuba—; resuming cruises; reopening flights to all Cuban provinces—now they can only use Havana; and granting specific licenses for businesses in the sector, mainly hoteliers, such as the one Marriot had until a few months ago in a hotel in the capital. All of the above means reaching one million Americans a year in a couple of winter seasons, when the vaccination is in force.
But this would be more of the same, something that can be reversed after 4 or 8 years.
We can do an exercise on what measures a new Democratic government should take to add to those implemented by Obama, and make these changes irreversible. The ideal, the most logical and beneficial, surely for both governments and peoples, would be for the new administration to endorse the legislative proposal to eliminate the embargo/blockade once and for all.
If the general license is restored for all trips known as “people-to-people,” without absurd restrictions, the volume of passengers staying in all types of accommodation offered by the country could be equalized.
Another important measure would be the expansion of exchange in all sectors of cultural, academic, social, sports, economic, scientific and research life, which would expand the exchange between the two peoples, with travel in both directions and increase the demand for services of travel in both countries.
We have to handle well this “second-rate” tourism market, as long as the blockade laws persist, even better than during the four-year boom between 2014 and 2017. It cannot distort our strategy of source markets, nor our tourist product strategy, more ecological, closer to what nature needs.
On the Cuban side, measures have already been published that I consider necessary to assume the changes that tourism has experienced in the last 10 years, some deepened by the pandemic. These are actions that are linked to the economic reform announced on July 16 and that need to be implemented with total firmness so that they give the results that the country requires.
It should be borne in mind that the flow of travelers from the U.S. goes to the country’s cities and, to a lesser extent, to the rest of the offer of accommodation and other services, read sun and beach, although those of nature are also visited mainly by groups interested in this topic.
If in terms of the sun and beach destinations the service offer is enriched by geographically widening its scope, so that local society is part of it, more “people-to-people” clients would be attracted.
The new government could authorize travel for health reasons for its citizens, who are denied the possibility of taking advantage of Cuba’s advances in this area, as has been demonstrated in many cases during the pandemic.
A new air policy for the country, which gives foreign airlines access to the international market, with routes to Cuba and even domestic routes, will have a very positive impact on expanding destinations on the island. This would be done by granting air freedoms even for domestic flights, which is known as cabotage.
The entry into the small and medium-sized enterprise sector, both state-owned, cooperative and private, will increase the quality of the offer of services to travelers, and will further increase the motivations for traveling from the U.S. to see these changes. Of the measures included in the economic reform, the only concern is that the private and cooperative sectors are forced to use state-owned enterprises to import and export. This seems like something inherited from our previous way of thinking the economy. Instead of state foreign trade enterprises competing for customers among these new small and medium-sized enterprises, they are imposed from above. Eliminating that restriction would be a net benefit for the Cuban economy.
The chain of services of the state sector with the cooperative and private sector would have the same effect, to enrich the experience of each visitor from the U.S. This is particularly important between state and private travel agencies, which will arise now or already exist, in fact, with some licenses that allow offering very limited services, but that in the new conditions must expand and add products, initiatives and services to the value chain that would revolutionize each visitor’s experience.
If we manage to make Cuba a “smart destination” that enriches our values, our solidarity, hospitality, popular culture and Cubanness, the motivation for Americans to travel to the island would be consolidated.
As for the other segment of the U.S. market for trips to Cuba, Cuban-Americans and their families (552,000 traveled to the island in 2019), it is the second market in number of visitors, only surpassed by Canada. And this is a “top” market for the country and it must be treated as such.
It a “top” market because, just taking into account its importance for the tourism sector, it is always growing, there is no situation that stops it, there are few who come to stay outside the residences of their relatives, but they create an important demand in the services that contribute more income to tourism: catering, to which are added packages with accommodation to vacation with their families. It is a segment that demands specialized attention, that consequently understands the demand it generates, and that demands products and prices that are worthy of its importance.
The Cuban government’s relations with emigration have improved ostensibly and steadily. There are still pending issues, which should have been aired at the Conference of the Nation and Emigration, postponed for next year, but the measures that were to be announced there should be applied as soon as possible, if, as we all suppose, they are to improve conditions for the trips of Cuban emigrants or those who travel abroad.
Lowering passport prices, eliminating its extension and extending its duration to 10 years are measures that everyone expects and would benefit more than a million Cubans living outside the island. They would also be very positive for the Cuban economy, since they constitute an important incentive to increase travel. There are many who give up traveling due to the high cost of these procedures and documents.
Cuba’s customs regulations must be completely reformulated. The announced economic reform entails a radical change in the philosophy behind what is regulated to enter goods into the country by its citizens. It must also be understood that each regulation that blocks, limits or restricts the free flow of goods that are not harmful to human beings—such as drugs, explosives, dangerous materials, etc.—does nothing more than encourage corruption.
If what travelers can import with their accompanied cargo when entering the country, or 20 kilograms of a package sent by a relative (and the content of both forms of import are not goods such as gold, precious stones or small electrical appliances, but expensive, such as cell phones, etc.) affects the country’s economy, then it is the latter that has to be fixed, as now it seems we are going to do with the announced reform.