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Despite an embargo which has now lasted more than fifty years, Miami became the city which reported the greatest number of flights to Cuba this summer.

A recent study on Cuba-bound US flights revealed that, in the course of 30 days of monitoring (from June 17 to July 17), more flights left for the island from Miami than from such major Canadian cities as Toronto and Montreal. The data represents a sample of a study currently being conducted by The Havana Consulting Group, to be completed by year’s end.

In recent years, those two Canadian cities figured at the top of Cuba’s tourism market, accounting for large volumes of tourists who visit Havana and other popular destinations around the island every year (1.1 million visitors in 2012).

When, following Fidel Castro’s revolution of 1959, Cuba broke all ties with the United States – its main trade partner until that point – the country lost the attendant benefits of these relations, from the testing of new US-made automobiles to the anticipated launching of novel products by Procter & Gamble.

Flights to Cuba were among the many services, products and offers that disappeared following the abrupt end of all diplomatic and financial relations between the two countries.

Today, more than fifty years after this political falling-out, Miami has once again become the most important source of Cuba-bound flights around the world.

More Destinations and Airlines

A total of 332 flights with seven different destinations in Cuba were registered during the study’s first month of monitoring. The most popular destination was Havana (reporting 230 flights, or 69.28 percent of Cuba-bound traffic). It was followed by Camaguey, Cienfuegos, Holguin and Santa Clara, reporting 29, 28, 22 and 15 flights, respectively.

Santiago de Cuba and Manzanillo (with four flights each) were the destinations which reported the least number of flights.

Below is a breakdown of Cuba-bound US flights over the period studied:

Habana     230  69.28%
Camaguey  29  8.73%
Santiago de Cuba  4  1.20%
Holguin   22  6.63%
Manzanillo 4  1.20%
Cienfuegos  28  8.43%
Santa Clara  15  4.52%

Total  332  100.00%

The flights were offered by six different airlines, which employ planes with capacity for 150 passengers. Skyking reported the greatest number of flights (146). It was followed by World Atlantic (82) and American Airlines (54). The airlines with the least traffic between June and July were Sun Country Airlines, American Eagle and Miami Air.

1 Skyking     146  43.98%

2 Sun Country Airlines     29  8.73%

3  World Atlantic  82  24.70%

4 American Airlines 54  16.27%

5  Miami Air  2  0.60%

6  American Eagle   19  5.72%

Total  332  100.00%   

These market trends stem from policies which Barack Obama’s administration has been implementing since 2008, when he lifted travel restrictions which had limited the number of trips to the island by Cuban-Americans to a single trip every three years. As a result of the lifting of these restrictions, 573,968 people travelled to Cuba from the United States in 2012, making the United country Cuba’s second largest source of tourism that year.

The US Cuba tourism market has shown significant growth in terms of the number of Cuban-American and non-Cuban visitors to Cuba.

A total of 475,936 Cuban-Americans traveled to Cuba in 2012. If the rate at which US residents are traveling to Cuba keeps up, the figure could exceed that of 520,000 visitors this year.

People-to-People Exchanges

Trips organized as part of people-to-people exchanges, reinstated by the Obama administration in 2010, has led to an increase in visits by US citizens who are not of Cuban origin. Last year alone, Cuba received 98,050 such visitors, and the number is expected to exceed that of 107,000 in 2013.

Even though such trips aren’t organized with expressly “touristic” ends, they do spell considerable profits for all parties involved, so much for the travel agencies as for the Cuban government. The most expensive packages in the market are those sold to English-speaking travelers. For example, the price for a 12-day package ranges from US $ 6 to 8,000 per passenger.

The most significant development in this connection is that the increase in US tourism has compensated for the drop in European tourism over the last six years. The five main sources of Cuba-bound tourism in Europe continue to show a drop in visitors, reporting a decrease of 181,237 tourists from 2006 to 2011.

Cuba’s domestic market is also experiencing changes these days. In recent years, the country has witnessed a notable increase in domestic tourism within Cuba’s tourism network, and it is not uncommon to see Cuban émigrés enjoying a stay at a hotel in Varadero, Guardacalada and luxury keys in Villa Clara and Ciego de Avila next to their relatives on the island.

More Charter Companies

If US flights to Cuba have clearly been on the rise of late, the same may be said of agencies licensed to offer charter flights to the island. This year, the number of charter companies authorized to operate by the Treasury Department’s Office for Foreign Assets Control (OFAC) went up to 31, from 12 licensed to operate in 2011.

Cuba’s reformed migratory law has also contributed to the market demands which skyrocketed following the lifting of US travel restrictions. This combination of liberalizing measures implemented by both governments has had directly led to an increase in the number of agencies licensed to fly to the island.

In 2013, the number of agencies operating in the United States licensed to sell tickets on Cuba-bound flights rose to 328, from the 68 which were operative in 2011.

A Multi-Million Dollar Business

The study also revealed that, in the period analyzed, travel agencies took in US $23,764,500 in profits from air ticket sales alone. This means daily profits of US $792,150, which could spell earnings of $289,134,750 a year for all companies operating in the market.

These figures do not include profits earned by these companies for passport services, tourist packages or overweight luggage fees.

Agencies aren’t the only ones making good profits. The growth of the market also implies a juicy business for Cuba. The study includes a questionnaire with 31 queries about trips to Cuba, remittances and travel expenses during trips to the island. The survey revealed that travelers to Cuba spend an average of $ 3,500 dollars in cash to cover expenses on the island.

If we consider that Cuba receives some 1,660 visitors a day, this means profits of some US $6,027,750 a day for the Cuban government, for a total of 2.2 billion a year (provided trends do not change).

These figures have been very well received by Havana. It is not surprising that, during a recent visit to Miami, two officials from the Cuban Interests Section in Washington made know that some other aspects related to Cuba’s economic reforms may be forthcoming.

Licking Their Chops

During an address aimed at a group of Cuban émigrés who support the normalization of US-Cuba relations, Consul General Llanio Gonzalez Perez referred to the creation of new laws aimed at extending Cuba’s economic reform process. One of these would be a new foreign investment law, which will allegedly allow Cuban émigrés to invest in the island.

The fact of the matter is the Cuban government has no other alternative. The lack of liquidity shown by Cuba’s economy was even one of the issues debated at the last session of the Cuban National Assembly (though the matter wasn’t directly mentioned in the meeting’s official reports).

In addition, Cuba is denied access to international financial mechanisms such as the World Bank, the IMF and the Inter-American Development Bank; has seen its oil prospecting efforts in Cuban waters end in a veritable fiasco; faces the decline of the sugar industry and the profound crisis of Venezuela’s economy, which is already witnessing shortages of essential consumer products.

Should Cuban émigrés be permitted to invest in Cuba, the new legislation will face the hurdle of the US embargo, which forbids US citizens and residents from taking money to the island. The Cuban government, however, appears to have decided to reestablish the ties broken 50 years ago, and the dividends secured from tourism and remittances afford a push in this direction.

Source: Havana

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