The Cuban government has a new tourism plan underway that sets a target of seeing five million tourists visit the island in 2019. News of the Cuban government’s latest goal comes just as Washington D.C. has begun to enforce increased restrictions on American travel to the nation. While the United States is by no means the only market from which Cuba can entice tourists, it remains the largest within the region, thereby putting a real dent in Havana’s new ambition.
So can the new chapter in Cuban tourism be a success, or will it stall before it even gets out of the starting gate? And what does this next chapter in Cuban tourism tell us about the future of the Caribbean tourism market as a whole? In order to glean the answers, it’s essential to consider not only Cuba’s current industry, but its history. That’s why this week will be part one of our STAR Businessweek two-part special on Cuba’s latest tourism push and what it means for the wider Caribbean. Let’s kick off now.
A New Journey
The recent history of Cuban tourism shows that the industry has long been an embattled one. This is no reflection on the good and hardworking people who toil daily within it, but instead an acknowledgement that the politics of the nation directly permeate the tourism sector in a way that’s distinct from essentially all other nations in the Caribbean.
The Cuban tourism industry is one with a diverse history. Renowned as a tourism destination and gambling hotspot before the Cuban Revolution of 1959, the Cold War years saw it continue to draw to its shores some ‘true believers’ in the communist cause, seeking to soak up the sun, sand and dreams of global socialism. But the contrast due to the sudden loss of the tourism dollar was immense, seeing visitors drop from 270,000 in 1959 to under 4,000 after the Revolution.
Following the collapse of the USSR, devastation reigned over the Cuban economy due it having been so deeply intertwined with that of the Soviet bloc. In the space of just four years, 1989-1993, the nation’s GDP dropped 35 per cent, imports went down by 75 per cent, and exports dropped by almost 80 per cent.
Due to this decline, bolstering the tourism industry was flagged as a key priority. For a regime suddenly in need of an economic lifeline, navigating the decade ahead, 1991-2000, was such a time of high stakes and change that today economists call it the Special Period in Cuba’s history.
New Allies in the Special Period
The Special Period saw the Cuban government scramble globally for some relief to its bottom line. It found it in some economic forces like Venezuela’s Chavez regime that would ultimately not endure. By contrast, though the newly formed Russian Federation led by President Boris Yeltsin was chiefly focused on challenges closer to home in Eastern Europe, the arrival on scene of Vladimir Putin in 2000 saw strong economic ties formed once more between Moscow and Havana.
Alongside the establishment of new economic relations, the 1990s saw Cuba’s government inject US$ 3.5bn into the tourism industry, ultimately seeing the nation’s available lodgings triple from 12,000 to 35,000 from 1990 to 1999. Entering the 21st century, the investment of the decade prior had paid dividends, with the tourism sector drawing US$ 1.6bn in revenue in 2001 alone, and overtaking sugar and tobacco as the country’s most profitable industry.
Although the industry has grown, it also suffers in unique ways. Though Cuba has long been a popular port of call for Canadian and European holidaymakers seeking to escape extreme winters, the same audience, by virtue of being acclimatised to far cooler temperatures at home, is less likely to book a plane ticket in the sweltering summer months.
America’s Role in Cuba’s Tourism Industry
All in the Caribbean family know that the US and the post-revolution Cuban government have not enjoyed a good relationship. The lowest point of this relationship was undoubtedly in the 1960s with the Bay of Pigs fiasco and the high-stakes tension of the Cuban Missile Crisis.
Even with the fall of the USSR — Washington’s greatest rival and Havana’s closest ally — the relationship barely improved an inch, with the loss of economic trade between the two nations being at the core of the consequences. Estimates over the past decade show that ever since the Kennedy administration imposed a full embargo on the island in 1962, a colossal US$ 1.126tn was lost in profit by Havana.
There was much fanfare and talk of a new era in late 2014 when the Obama administration announced it would begin to normalise diplomatic relations and open an embassy in Havana, with Havana doing the same in Washington, but the same ease with which the then US president wielded power as the nation’s chief diplomat in order to restore relations, has empowered his successor to fracture them.
Alongside the levers of diplomatic power that the White House wields, President Trump activated the long suspended Title III of the 1996 Helms-Burton Act which allows Americans who have a claim to property in Cuba (including Cuban-Americans who weren’t citizens at the time of the Act) to file suit against those using the property. This law helps give further effect to Washington’s latest embargo, and is a clear signal that this current US administration will travel a far different path from its predecessor on Cuban relations.
The Cuban government may cry foul over this latest move but it’s worth recalling that although Havana has made some modest moves to reform in some sectors of its society, there remains immense suppression of civil freedoms and corruption, all in a culture of fear that persists today. Washington has repeatedly indicated that it would seek warmer relations should the Cuban government better recognise the human rights of the Cuban people, but it’s been largely to no avail.
As will be detailed more in the second instalment of this article, Cuba had 4.7 million tourists visit its shores in 2018. Of those, 639,000 were American. With the new measures by the Trump administration announced, and the expected drop in arrivals from the US, Cuba now faces the prospect of sourcing an extra million or so visitors in order to hit its target of 5 million.
Whether the Cuban government can hit the target, and what this new US-Cuban dynamic means for wider tourism in the Caribbean, will be covered in-depth next week.
