Fears for Cuba as American visitors set to rise sevenfold by 2025

Cuba is “huge opportunity” for US travel companies, according to a new report

Cuba's classic Americana may be a thing of the past with visitor numbers exploding (AFP/Getty Images)

American visitors to Cuba could increase by seven times by 2025, according to a new report – putting the Caribbean island’s infrastructure under enormous strain and sparking fears for the future of the country as US investors move in.

The report, drawn up by the Boston Consulting Group, notes that Cuba represents a “huge” but challenging opportunity for US cruise, airline and hotel companies as American visitors continue to spiral.

As many as 2 million Americans could visit in the future – up from 285,000 last year, excluding Cuban Americans – the BCG study published on Wednesday estimated.

Given tourism infrastructure is already creaking, that means there are business opportunities aplenty but US companies must learn to navigate a centrally-planned economy with its quirks.

US travel to Cuba has already surged, albeit from very low levels, in the last two years since the former Cold War allies announced a detente and the Obama administration eased travel restrictions to the island.

“The reality is that U.S. travel to Cuba is in its nascent stages, and all the players are still learning how to make it work,” the report read. “Success, as with most things Cuban, will require unusual - and often unorthodox - approaches”.

BCG did not address the uncertainty cast by the election of US President Donald Trump who has threatened to row back on the normalisation of relations.

The Cuban government aims to double hotel capacity by 2030 through partnerships with foreign companies, it pointed out. So far, Starwood is the only US hotel company operating in Cuba.

Instilling a hospitality mindset in tourism workers who were mostly state employees, even at US-owned companies, on low wages could be challenging, it noted.

Poor service sat particularly badly when rooms were “extremely expensive for the region”.

“The risk is that US travellers who visit Cuba and stay at a hotel that is part of a brand they trust will experience prices much higher than usual - and more customer service,” the report read.

Meanwhile there was also an opportunity for expanding cruise lines to Cuba, BCG said. Nearly two thirds of 500 US travellers surveyed would consider one to Cuba. Several US cruise operators have started offering lines to Cuba in the past year.

They have to deal with different challenges such as including a cultural element to their trips to comply with US government rules on travel to Cuba, BCG noted.

US companies should work together with the Cuban government to resolve some of these issues.

As for airlines, they needed to deal with excess demand for flights to Havana. They could carry out campaigns to lure Americans to other Cuban cities, BCG advised, and tap into Cuban demand for flights to the United States.

Meanwhile, the bid to make tourism in Cuba sustainable continues. Not only does the island lack infrastructure; but restaurants are buying up food, meaning locals are being priced out.

In February, Justin Francis, CEO of Responsible Travel, told The Independent that “tourists are literally raiding food off the plates of the Cubans.”

Today, he added:

“Cuba has been sold in the past few years with the line, 'You'd better get there quick before the Americans visit in big numbers.' It's proved to be a very effective marketing strategy because there is a genuine fear that Cuban culture, which is so attractive in part because it hasn't be changed by tourism, is about to suffer.

“While many in Cuba live in poverty and need income from tourism, some forms of tourism, such as cruises, return little to local people. Cuba needs responsible forms of tourism and would be wise to note how Venice and Barcelona are reeling from the effects of overtourism which detracts from both local people’s and tourists’ experience of a destination. Cuba is a prime overtourism candidate and needs to avoid that.”

Additional reporting by Sarah Marsh, Reuters

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