Caribbean hoteliers wake up to Cuba threat
 
Caribbean hoteliers wake up to Cuba threat
06 JULY 2015 9:23 AM
Caribbean hoteliers and tourism officials are finally waking up to the reality of Cuba as a major competitor. Their response might be too little, too late.
Every time I was in the Caribbean in the past 40 years—and it was plenty of times—one of the first questions I would ask a hotelier or tourism official was what would the effect be of opening travel to Cuba from the United States on the tourism business for the other islands in the region.
 
Invariably, the politically correct answer I would get was something like this: “We welcome the opening of Cuba to the rest of the world, especially to tourists from the U.S. because it will expand the business base for all of us.”
 
And as recently as February, as reported by Hotel News Now, hotel executives operating in the region still said they welcomed a Cuba that’s more open to U.S. tourists.
 
But today as doors from the U.S. to Cuba are quickly opening and full-blown tourism to the country is not far off, those same Caribbean tourism officials are singing a new song. I can’t read their minds, but I imagine fear, trepidation and panic are the basic emotions they feel right now.
 
In response to this new-found angst, a white paper from the Caribbean Hotel & Tourism Association paints a not-so-rosy picture of Cuba as a major disruptor to tourism receipts and investment into other countries in the region.
 
The answer, as proposed by the CHTA in the white paper, is the creation of a Caribbean Basin Tourism Initiative as a collective way to lure additional infrastructure and tourism investment, as well as to marshal marketing efforts to attract additional tourism dollars from around the world, but specifically from the U.S., the Caribbean’s largest source market.
 
I had to laugh when I read the report. This idea of joint marketing cooperation among Caribbean nations has been on the table for decades, and nothing has ever happened. I remember in the 1980s listening to Bob Crandall, then president of American Airlines, tell Caribbean tourism ministers that cooperation, not provincial bickering, was the way forward for the region’s tourism industry. Everyone at the conference nodded in agreement, but nothing was ever done about it.
 
That same provincialism at work today means this initiative will never get off the ground. And now as Cuba begins to open up to American tourists, investment from U.S. companies won’t be far behind. The total end to the U.S. embargo of Cuba is only a matter of time—and even could happen before President Barack Obama leaves office in 2017.
 
The conventional wisdom has been that U.S. hotel companies—everyone from Marriott International to Hilton Worldwide Holdings to Best Western International—have dust-covered files somewhere in their headquarters outlining the brands’ plans to infiltrate Cuba once the red light turns green. My guess is, even as I write this, there are task forces formed in Bethesda or McLean or Phoenix, or all three places and many more, to dust off those files and discuss how soon they and their partners can begin hotel development in Cuba.
 
The problem is unless something happens fast, many U.S. chains and developers might be left out of the development party, or will only be left with development sites and opportunities in less-than-ideal locations. Spanish and Canadian chains have long had a foothold in Cuba, and soon they’ll be hosting tourists from the U.S., in addition to their existing clientele from Europe and elsewhere in the Americas.
 
The Chinese, who have long coveted a financial and political foothold in the Caribbean, also want to build in Cuba. Last month, the Cuban government announced a joint venture with a Chinese developer to create a $462-million golf resort east of Havana. If this project coalesces and is ultimately successful, I’m sure additional Chinese-Cuban development will follow.
 
And, of course, those opportunists from Airbnb already have established their mark in Cuba with as many as 2,000 listings for accommodations on the island. While there are some significant hurdles for the sharing-economy site to make a lasting mark in Cuba, it probably will prevail given Airbnb’s core audience of millennials and other experiential travelers looking for unique destinations to brag about.
 
And while Caribbean tourism leaders worry about Cuba, they have plenty of other issues of concern. One, of course, is the train wreck known as Baha Mar, the yet-to-open megaresort in the Bahamas that recently filed for bankruptcy. And Puerto Rico, an island gifted with natural beauty and significant advantages over other Caribbean islands as a tourism destination, teeters on the verge of insolvency. These unsettled situations are sure to drive potential developers and hotel companies to look elsewhere—such as to Cuba.
 
Ten, 20 or 30 years from now this might be a non-issue, and Cuba might have taken its place along with other Caribbean countries as just another sun-and-surf vacation getaway destination. But my guess is sometime in 2035 Caribbean tourism ministers will meet somewhere to discuss a proposal for a marketing cooperative that will never get off the ground. 
 
Some things never change, and this is destined to be one of them.
 
Email Ed Watkins or find him on Twitter.
 
The opinions expressed in this blog do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.
 

2 Comments

  • Michael Shindler July 6, 2015 8:13 AM

    Ed's insights here are superb. Another considerable issue is that, despite the dust-covered files, the US hotel companies have limited presence or contacts in Cuba, and they all have awaited a window to enable their involvement. Now that the window seems to be a door, there may not be the time to catch up with the Canadian and Spanish developers, nor willing financial resources to match the Chinese. Though I suspect that Cuba's infrastructure needs improvement (and that will come), the US lodging companies are likely going to be somewhat on the outside looking in for a while.

  • Anonymous July 13, 2015 12:36 AM

Comments that include blatant advertisements or links to products or company websites will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff.