Tourism Industry Disappointed In New Cuba Policies
President Trump’s plan to roll back diplomatic and trade openings to Cuba has some business leaders upset. They had positioned their businesses to benefit; now strict limitations are back in place.
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And for American entrepreneurs who looked at Cuba and saw an untapped market of more than 11 million people, Trump’s new policy is disappointing. Charles Lane from member station WSHU reports.
CHARLES LANE, BYLINE: Academics estimated that U.S. companies would’ve grossed about $4.5 billion over the next four years in trade and tourism with Cuba. Most of that is tourism, which is likely to decrease now that Americans can only travel with groups. Augusto Maxwell is a lawyer who advises companies doing business in Cuba. He says American travelers like their freedom.
AUGUSTO MAXWELL: They’re going to be upset that they now have to go with a tour group that is going to control their agenda – versus their ability to go there, stay at an Airbnb and go to a private restaurant and make their own conclusions.
LANE: Six hundred thousand Americans traveled to Cuba last year, the same number who travelled to Australia. Maxwell predicts the number of flights will drop. But the number of cruise-ship passengers will likely remain the same. That’s because cruise-ship passengers often travel in groups.
The big crunch will be on where to sleep. Havana’s official hotel sites are all over-capacity, which opened the door to the room-renting site, Airbnb. They book about 10,000 a year to Americans. Regulators still have to write the rules. So right now it’s unclear how the new policy will be enforced.
What’s also unclear is if the multimillion-dollar hotel deal between the Cuban military and Starwood, which is owned by Marriott, is still viable. The White House said all previously inked deals are still valid. But they also said Americans will not be permitted to stay at military-owned hotels. Overall, Maxwell says the mood in the tourism industry is down.
MAXWELL: In order to promote freedom in Cuba, they’re denying Americans the freedom to travel. And I think that that’s controversial.
LANE: The Trump administration says that America’s long-term partner is the Cuban people, not the Cuban government, which the administration criticizes as oppressive and anti-American. Richard Feinberg says that’s true. He is a professor of international political economy at UC, San Diego. He says even though the current embargo allows for American telecom companies to do business, the Cuban government has been reluctant.
RICHARD FEINBERG: Google actually went down there and said to the Cubans, hey, we will wire the whole island, and we’ll do it free of charge. And the Cubans said, no thanks. We’re scared that an American firm might compromise our security. And we prefer to deal with the Chinese at this point.
LANE: For American entrepreneurs, this is frustrating. Right now we only export about $200 million a year in commodities and humanitarian products. Feinberg says it could be so much more. Trump’s rollback, he says, cedes the head-start advantages to other countries. But just because the U.S. is pulling out, that doesn’t necessarily mean foreign companies will rush into Cuba. Risa Grais-Targow is an analyst at the Eurasia Group.
RISA GRAIS-TARGOW: Because the Helms-Burton Act of 1996 actually allows for the U.S. to punish third parties that do business with Cuba, we’ve actually seen a pretty limited amount of foreign companies doing business on the island.
LANE: Grais-Targow says that when U.S. restrictions were first eased, there was growing excitement from across the global business community to make investments in Cuba. But now she expects that excitement to wane. For NPR News, I’m Charles Lane.
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