Cayman among countries most impacted, report says
The emergence of Cuba as a rival for tourists and investment dollars will change the travel landscape in the Caribbean forever, industry leaders have warned.
Caribbean tourism officials are pushing for a new partnership with the U.S. amid growing concern that the thawing of relations with Cuba will have drastic consequences for neighboring islands.
“The biggest and most disruptive pebble to be dropped into the Caribbean pool in fifty years will arrive with the opening of travel to Cuba for United States citizens,” the Caribbean Hotel & Tourism Association warns in a position paper.
The association says islands closest to Cuba, including the Cayman Islands, are likely to suffer the “greatest ripple effects.”
The association is looking to create a Caribbean Basin Tourism Initiative to help boost investment and travel across the region with help from the U.S. The initiative calls for technical and policy support from the U.S. to ensure the stability of tourism-based economies in the region if U.S. tourists are, as expected, allowed to visit Cuba after a 50-year embargo.
“While U.S. tour, airline and cruise executives are eyeing the tourism potential of the long-forbidden paradise 90 miles south of Key West, Florida, conflicted stakeholders throughout the wider Caribbean have legitimate concerns [over] whether there will be a level playing field and whether the rest of the region will grow tourism arrivals or lose tourism investments and arrivals as they divert to Cuba,” said Caribbean Hotel & Tourism Association President Emil Lee.
The association’s position paper acknowledges that the lifting of the embargo and changing of legislation regulating travel, trade and financial transactions between the U.S. and Cuba is dependent on Congressional action and most likely the results of the next presidential election.
“The good news may be that this state of affairs provides the individual countries of the Caribbean time to get [their] affairs in order,” the position paper noted. “Once again, the gods are smiling on the Caribbean. They tell us with sufficient time in advance that a disruptive force is on the way.”
It states a “time capsule” effect is already driving up tourism in Cuba, with visitors motivated to see the island before it is altered by development.
From January to early May, Cuba saw a 36 percent increase in U.S. visitors from the same period in 2014. It also had a 14 percent jump in other international arrivals, and Caribbean tourism officials say they expect those numbers to keep rising.
“Those countries whose focus has been on the United States as their primary source market and who have not felt any competition from Cuba … will be surprised at how sophisticated and effective the Cuban marketing machine has become,” the report says.
The report also warns of a possible impact on airlift from the U.S. to other Caribbean destinations.
“One new concern has to be the possible willingness by the airline industry to absorb low airfares and load factors for a period of time in order to build routes and market share in Cuba. This could be disastrous for the wider region, especially if it also results in U.S. carriers shifting aircraft to new Cuba routes upon the lifting of the embargo.”
Cayman Airways is launching a new route between Miami, the Brac and the coastal city of Holguin in eastern Cuba this year. The report suggests that kind of option should be pursued by local carriers to cash in on “combination vacations.”
The impact on the cruise industry in Cuba will be immediate, the report says.
The major cruise companies have a well-established track record of successfully investing in new port infrastructure, and quickly establishing new or improved ports of call.
“The likelihood that cruise lines will drop some existing ports to accommodate Cuba port visits is real and the proximity of Cuba to the U.S. mainland can allow for Cuba to be easily added to a schedule that can impact itineraries to near markets such as the Bahamas, the Cayman Islands, and Jamaica,” the report says.
Supporters of a new cruise dock in Cayman have warned that the island needs to invest in cruise piers so that it will “rise with Cuba” rather than losing its place in the market.
The Caribbean Hotel & Tourism Association report also sounds a cautionary note for the future of hotel and infrastructure development in the Caribbean.
“The fact that Cuba saw over $800 million in hotel-related investments in 2013 is a sobering thought. The Caribbean and its industry will find itself not only competing for American tourists but also for investment dollars,” it states.