Loss of visitors to other countries a major concern
BY MIMI WHITEFIELD
Cuba is poised to become the new darling of Caribbean tourism and its good news could be the region’s bad news.
Caribbean tourism officials are fearful that if the United States allows free travel to Cuba by Americans, it will result in a significant loss of visitors to the rest of the Caribbean if the region’s countries — including Cuba — don’t find ways to work together to increase the Caribbean tourism pie.
In a position white paper released in June, the Caribbean Hotel & Tourism Association said that “the biggest and most disruptive pebble to be dropped into the Caribbean pool in 50 years will arrive with the opening of travel to Cuba for United States citizens.”
But Frank Comito, chief executive of the CHTA, said he prefers to view the potential Cuban tourism juggernaut as an opportunity rather than a threat.
“It’s a wake-up call,” he said, but also presents an opportunity for the Caribbean to begin working together on improving marketing, offering dual destination visits, easing barriers such as cost and ease of travel, sharing best practices, and using tourism more effectively as an economic development tool.
About 70 percent of Caribbean visitors come from the United States, Comito said. “If we don’t make the pie larger, when we’ve inserted this big player, the pie gets smaller for all of us.”
Currently the United States doesn’t allow Americans to travel to Cuba on vacations, but purposeful travel is permitted in 12 categories such as people-to-people tours and educational and humanitarian visits. Cuban Americans may travel freely to the island on family visits.
Since the United States and Cuba planned to renew diplomatic relations and open respective embassies on July 20, there is increased pressure to lift all Cuba travel restrictions.
Cuba is already the second-largest tourism destination in the Caribbean, surpassed only by the Dominican Republic. Last year, Cuba received 3,001,968 stopover visitors — a 5.3 percent increase — and during the first quarter of this year the Cuban Tourism Ministry said it received a record-breaking 1.14 million travelers.
No commercial airlift
Not all of those are U.S. travelers, of course. Excluding visits to Cuba by Cuban Americans, the number of U.S. travelers is relatively small. There also is no commercial airlift from the United States to Cuba, and Americans traveling directly from the U.S. must rely on charter flights.
But the Cuban government estimates that if there were unrestricted travel from the United States, annual trips by Americans would increase by 1.5 million, generating an extra $2 billion in revenue.
Those countries that have felt little competition from Cuba for U.S. visitors in the past and “might have been lulled into believing that Cuba is a greenhorn at tourism, will be surprised at how sophisticated and effective the Cuban marketing machine has become,” said the CHTA paper.
But it emphasized: “Cuba’s development in tourism should not be to the detriment of the rest of the Caribbean.”
To avert that, the CHTA has a single proposal: creating a Caribbean Basin Tourism Initiative similar to the Caribbean Basin Initiative, a public/private partnership with the United States that began during the Reagan administration to encourage manufacturing and investment in the region.
Expanded in 2000, CBI-related legislation now provides duty-free access to the U.S. market for most goods from 17 beneficiary countries.
(Some Caribbean leaders don’t see a negative impact if Cuba opens up fully to Americans. “We really believe we’re not going to be hurt by it,” Grenada Prime Minister Keith Mitchell said recently during a panel on Caribbean issues at the Toronto Global Forum. Mitchell, who stressed that Caribbean leaders have long called for normalized relations between the U.S. and Cuba, said growing arrivals from Asia and elsewhere will make up for any loss to Cuba. “The region, as a whole, will be enhanced,” Mitchell said.)
Focus on tourism
In the early 1980s, there was an effort in Congress to have the tourism industry added to CBI trade concessions and tax incentives. But the only nod to tourism ended up being an allowance for U.S. citizens attending Caribbean Basin conferences to write off their expenses as they would if attending a conference at home.
However, countries had to negotiate a tax information exchange agreement with the United States before the tax-break provision would be operative.
“Tourism is an export product — although it certainly wasn’t viewed as that in the 1980s,” said Comito.
The idea for a Caribbean Basin Tourism Initiative would be similar to the CBI, but instead of promoting manufacturing it would focus on tourism “to strengthen the region’s economies and stimulate trade and investments within the Caribbean and with the United States,” the paper states.
“We recognize that the opening of Cuba to American tourists will have an impact on both Cuba and the region and want to maximize the positive benefits for all stakeholders and, at the same time, set a tone for a new era of cooperation among Caribbean nations,” said Emil Lee, president of CHTA and a St. Maarten hotelier.
Such an approach would require congressional approval, and Comito said CHTA is in discussions on how to push the agenda forward with Caribbean-Central America Action, a Washington-based organization that promotes private sector economic development in the Caribbean Basin.
The paper calling for a collaborative approach to Caribbean tourism development has been distributed to regional government and business leaders and was presented to the U.S. International Trade Commission for its consideration, said Comito said.
“We’ve gotten a very positive response from the private sector and our members,” said Comito. The CHTA also has made overtures toward Cuba and hopes to get a response, he said. “It’s both to their advantage and our advantage that we work together and learn from each other.”
Comito said the CHTA was preparing its white paper at the same time the ITC had asked for comment for an investigation it is doing on the economic impact of U.S. restrictions on trade with and travel to Cuba. It sent the paper and a letter to the federal agency in that context. ITC is expected to deliver its report to the Senate Committee on Finance by Sept. 15 but it will not include policy recommendations.
In the letter, Lee raised concerns that with U.S. tour, airline and cruise executives so focused on the potential of long-forbidden Cuba, there might not be a level playing field for the rest of the Caribbean.