A relaxation of travel restrictions between the U.S. and Cuba has raised concern across the Caribbean of the emergence of a powerful new competitor for tourist and investment dollars in the region.
But Cayman Islands officials and industry leaders are confident the destination can retain its market share, and suggest the territory may even benefit from the thawing of relations between the two countries.
The announcement Wednesday that the U.S. was renewing diplomatic relations with Cuba stopped short of sanctioning full-scale tourist travel. But it has been widely interpreted as the first step toward Cuba being fully opened up to American travelers.
According to Cayman Islands Tourism Minister Moses Kirkconnell, that is a prospect officials have been contemplating for some time.
He said the administration remains watchful but not unduly concerned.
“Their tourism model is a little different to Cayman. It is much more focused on all-inclusive resorts.
“We don’t believe it would affect our core market that much. We are optimistic about the tourism product of the Cayman Islands and the investment that is taking place over the next few years. We don’t believe we will lose market share if Cuba opens up.”
He believes cruise tourism in Cayman could even benefit from the emergence of Cuba. He said the opening up of more ports in the western Caribbean would allow cruise lines to offer more trips through the region that stop in Cayman.
Cayman Islands Tourism Association President Ken Hydes said the situation in Cuba does not change the priorities for the Cayman Islands. He said the territory still needs to focus on improving the airport, roads network and cruise terminal to ensure it continues to grow as a tourist destination.
Mr. Kirkconnell believes the prospect of widespread travel between the U.S. and Cuba is still some way off. But he said Cayman is positioned to take advantage if and when that happens.
“Strategically, we are very aware of the situation, and we have done our best to position ourselves as a destination in the region that is close to Cuba, to take advantage of them easing some of those restrictions,” he added.
In a research paper sponsored by the International Monetary Fund, academic Rafael Romeu suggested the liberalization of Cuba-U.S. tourism would cause a “seismic shift” in the Caribbean’s tourism industry. He suggested travel to the region would increase but warned, “Neighboring destinations would lose the implicit protection the current restriction affords them, and Cuba would gain market share.”
Pilar Bush, former director of tourism, said although the Obama administration promises to make it easier for Americans to travel to Cuba, a Congressional removal of the legal ban is likely still a few years away.
In the short to medium term, she said, the move represents a bigger threat to larger mass market destinations like the Dominican Republic, Bahamas and Jamaica, more so than an immediate threat to the Cayman Islands.
“In the years ahead, as travel restrictions are lifted, the natural beauty, allure and intrigue of Cuba will attract both American stay-over and cruise visitors, and investors.
“The Cayman Islands needs to position our trio of islands as an equally compelling but different type of Caribbean experience, one that complements rather than competes with Cuba. It’s time to focus on branding, positioning and creating a differentiated vacation experience that is meaningful to our target market,” she added.
Fabian Whorms, CEO of Cayman Airways, which flies twice daily to Havana, said it is too early to say what effect the move would have on the airline. Mr. Kirkconnell said he did not expect any immediate impact but said the planes could be easily redeployed in other areas if necessary.
Chris Pope, purchasing and logistics manager at Dart Realty, also runs a Cuba-based business importing goods, including bottled water and beer to the Cayman Islands, and is involved in a venture that aims to partner with Cuba’s national airline to offer multi-destination holiday packages in the two countries.
He believes the potential impact of Cuba opening up to U.S. tourists has been overstated.
“I think a lot of people are reading a bit too much into this. The governments are in the negotiations stage. The idea that Cuba will open up tomorrow to foreign trade is a long way from the truth. It is going to be a long, slow, process.”
Steve Pillar of Cayman Travel Pros, which offers package trips to Cuba, said it is already a popular destination for Cayman Islands residents and world travelers transiting through the territory.
“Personally, I think that Cuban tourism will grow because of the easing of restrictions on U.S. travelers. As far as it affecting our tourism product, we will have to wait and see. It is a different market from that of Cayman, but we shouldn’t be resting on our laurels. We need to make sure that we are offering the best product possible to our visitors.”