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A Cuban American man waits in line to check in his luggage for the next flight to Cuba at the Miami International Airport, Florida - Source: Reuters -
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The US leisure industry could reap rich rewards if lawmakers
relax Cuban travel bans, but industry experts warn that several
hurdles still block a potentially huge payday for cruise companies,
hotels and airlines.
Earlier this week, President Barack Obama opened a crack in the
decades-old US embargo against Cuba, allowing American
telecommunications firms to start providing service for Cubans and
lifting restrictions on family ties to the island.
The move marked a major shift from the prior approach to Havana, as
Obama ended limits on family travel and money transfers by Cubans
in the United States to their homeland and spurred hopes that
loosened travel restrictions could be next.
But experts warn there is little clarity on if and when limits on
commercial trade will be lifted.
Some expressed doubts about Cuba's ability to handle the
potential deluge of thousands of US tourists.
"The hype about US tourism in Cuba far exceeds the existing
infrastructure," said John Kavulich, senior policy adviser for the
US-Cuba Trade and Economic Council.
The travel industry has long eyed Cuba as a desirable destination
for American tourists.
The country's capital city, Havana, is little more than 322 km
from Miami, the home base of two of the world's largest cruise ship
operators: Royal Caribbean and Carnival Corp.
A port in Cuba would be a boon for these companies as they can
offer new trips at minimal fuel costs and jump-start demand for
more cruises to the Caribbean, a key market.
Americans "have not seen Cuba in 50 years," said Jay Lewis,
president of the Miami-based cruise consultancy Passenger &
Shipping Institute. "There is a great allure of the unknown."
European cruise operators have offered trips to Cuba for years and
Kavulich said two million tourists journey to the island nation
each year.
In the past decade, both Royal Caribbean and Carnival have bought
European companies that have at one point offered routes to
Cuba.
In 2000, Carnival bought Italian company Costa Cruises, and Royal Caribbean acquired Spanish cruise ship operator Pullmantur in 2006.
Both businesses stopped offering Cuban trips when they were
bought.
"We have a pretty good idea about the infrastructure there because
of the European lines that we acquired previously," said Tim
Gallagher, Carnival spokesman.
Cruise lines will likely benefit first, some experts said, because
it can take years to build up resort-style hotels on shore. Even
so, capacity questions remain.
"If you have a 2,000-passenger cruise vessel at the port of Havana,
at some point they're going to want to have lunch," Kavulich
said.
"There are three restaurants -- how are you going to feed 2,000
people at one time?"
Airlines stand to benefit
Obama directed the US government to look at sending regularly
scheduled commercial flights to Cuba.
Air travel between the two countries is now limited to charter
flights.
Demand for air travel between the United States and Cuba is
unclear, experts said. But they generally agree that airlines with
operations in Miami and up the East Coast are best-positioned to
win customers.
"There's huge pent-up demand," said Joe Schweiterman, travel expert
at DePaul University in Chicago.
"The hubs in the South will be attractive gateways to Cuba," he
said.
"Miami could support a full-blown shuttle operation."
At Miami International Airport, AMR Corp's American Airlines
carries the largest percentage of traffic by far.
JetBlue Airways and Spirit Airlines have large operations in
Fort Lauderdale, Florida.
"We have been flying some charter flights to Cuba," AMR spokesman
Tim Smith said.
"For the present, we will continue those charters based on
demand for them. (But it's) too early to talk about the future
beyond that."
Experts say Delta Air Lines and Continental Airlines with hubs in
the New York area, which also has a large Cuban population, stand
to benefit as well.
Cuban air travel has increased lately. Data from the International
Air Transport Association (IATA) showed a 7.3% increase in travel
to and from the nation in 2008.
Travel between Mexico and Cuba surged 10.9% in 2008, while
travel between Canada and Cuba fell 20.8%.
"We could see a significant increase in traffic with the changes
announced this week," IATA spokesman Steven Lott said.
"We see significant demand for expanded air service."
"It opens the door a little bit but not all the way," he said.
"This is certainly a hint of greater liberalization to come."
