Will be Cuba capable of coping with an onslaught of Americans?
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- Business and Economy
- 06 / 30 / 2009
But many wonder if a country where foreigners have long complained about lousy food, sluggish service and iffy infrastructure is ready for an onslaught of Americans unseen since the days of Meyer Lansky and Al Capone.
Cuba has about as many hotel rooms as Detroit and most are already full of Canadians and Europeans. Experts say droves of Americans could drive up prices, unleash calls for more flights and cruises than Cuba can handle and force the government to tighten visa restrictions to regulate the stampede.
“There is great pent-up demand,” said Bob Whitley, president of the United States Tour Operators Association, which opposes the travel ban. “It will have to be controlled by officials in Cuba, but also by U.S. tour operators to make sure the infrastructure is up to it.”
Bills in the U.S. House and Senate would effectively allow all Americans to visit. Trips for U.S. citizens with relatives here already got easier last month. Cuban-Americans can now come annually instead of every three years.
Cuba began encouraging international tourism after the fall of the Soviet Union, and its top feeder countries are Canada, Britain, Italy, Spain and France. Foreign tourist visits jumped 9.3 percent last year to a record 2.35 million, generating $2.7 billion or 11 percent more than 2007, the government says.
Despite the global economic downturn, international visitor rates have increased 4.5 percent through February as compared to the first two months of 2008.
An influx of Americans could create a lodging crunch. The communist state has partnered with foreign companies such as Spanish chain Sol Melia to offer about 46,000 hotel rooms across an island about the size of Pennsylvania. Some 17,300 of those rooms are concentrated in the beach resort of Varadero, 90 miles (140 kilometers) east of Havana.
Cuba plans to build 30 new hotels nationwide to tap into the market for boutique accommodations. Some of those have been completed, but many aging properties have been shut down for remodeling, leaving the total number of rooms flat since 2006.
According to Smith Travel Research, the 349 hotels in Miami and Hialeah alone have about as many rooms as all of Cuba. The city of Detroit, with 42,000-plus hotel rooms, is not far behind.
Even at top Cuban resorts, it is often hard to get amenities as basic as an extra roll of toilet paper. Comforts including apples, french fries and bottled beer are sometimes scarce — not to mention perks like in-room coffee-makers or wireless Internet access.
And, as in Eastern Europe in the 1970s, international tourists complain about sub-par food and service.
“You have maybe five hotels that you could consider decent enough for Americans and their standards, but if they are already running at 60-70 percent occupancy during high season, where are all these new people going to stay?” asked John Kavulich, senior policy adviser for the U.S.-Cuba Trade and Economic Council in New York.
Many travelers bypass hotels for rented rooms in Cuban homes. But the government does not allow those offering home-stays to rent more than two rooms, and few are hopeful those rules will be eased, no matter what happens to the U.S. travel ban.
“More demand won’t mean anything unless the government changes things,” said Concha Perez, who offers rooms in her home in Havana’s Plaza de la Revolution district.
U.S. travel to Cuba is not illegal, but spending money here is — except with special authorization like that for journalists and some businesses. In 2007, the latest figures available, about 40,500 Americans visited the island, most presumably on the sly. Tracking U.S. family visits is difficult since authorities count Cuban-Americans as Cubans.
Just how many U.S. travelers would come if Cuba weren’t off-limits is a guess. The American Society of Travel Agents estimated in 2007 that nearly 1.8 million Americans could visit in the first three years after travel rules were loosened.
To control the flow, the government might tighten rules on visas. Currently, tourist cards can be purchased at airports outside the U.S. or through travel agents.
“The Cuban government may go, ‘Just because you say your people can come doesn’t mean we have to let everyone in,’” Kavulich said. “People forget the United States is not the only one with a say.”
Cuba has long welcomed U.S. tourists with few questions asked and officials say they have taken no special precautions to prepare for more Americans. Deputy Tourism Minister Maria Elena Lopez said Cuba understands that aspects of its tourism industry need to improve. She singled out beach hotels overdue for renovations and a lack of golf courses: a 9-hole course in Havana and Varadero’s 18-hole club are the only ones on the island.
But instead of the beach or the links, many U.S. tourists will hit Havana for its classic if crumbling architecture and streets choked with 1950s American behemoths.
Americans “are all going to want to go to El Floridita and La Bodeguita del Medio at the same time and there won’t be space,” Kavulich said, referring to two ever-crowded watering holes made famous by writer Ernest Hemingway.
Whitley said the first wave of Americans could arrive by cruise ship and visit Havana only for a few hours, thus alleviating strains on hotels, restaurants and already hard-to-find taxis and rental cars.
“There’s going to be such a desire to see the country that people won’t care if they are in a five-star hotel,” he said.
Whitley said U.S. airlines and charter companies could restore commercial service to Cuba in six months if the travel ban is lifted. Other industry watchers say U.S. carriers could shift flights to different airports around the island to ensure Havana isn’t overwhelmed — at least until extra tourism generates enough revenue to improve infrastructure.
Added demand for limited tourist accommodations could drive up prices that already have been high since 2004, when the Cuban government banned the U.S. dollar in official transactions and imposed a 20 percent tax on exchanging it.
But Elliot Feldman, head of the international trade practice at Baker Hostetler LLP in Washington, said Cuba’s command economy may cap prices and supply to create buzz.
“They’d rather just have everything fully booked and make people wait a year or two to get a room than raise prices and hurt interest,” said Feldman, who has traveled to Cuba and litigates international trade disputes. “Having to wait to go only adds to the mystique.”