Tuesday 24 April 2018

Cooldown in Cuba: Is Donald Trump about to spoil Cuba's party?

What are the implications of the new US policy toward Cuba?

Musician playing upright bass, Santiago, Cuba
Musician playing upright bass, Santiago, Cuba
Havana, Cuba
Havana, Cuba
A man smokes a cigar in Cuba.

Gavin Haines

Earlier this month Havana was aflutter, as a new luxury hotel flung its doors open in the Cuban capital.

Billing itself as Cuba’s first proper five-star stay, the Gran Hotel Manzana occupies the top floor of a renovated belle epoque shopping mall in the old town.

The property is managed by Swiss-based Kempinski Hotels and owned by the Cuban government; many commentators felt it marked a new epoch for tourism on the island.  

A year ago Cuba could scarcely open hotels quick enough.

After the Obama administration relaxed longstanding travel and trade restrictions against Cuba, the number of tourists visiting the island soared.

For the first time in decades US cruise ships started docking in Havana, while scheduled flights were launched between the two countries. Reports surfaced that Cuba’s hotels couldn’t cope with the influx, leading Manuel Marrero, the minister for tourism, to announce that the country would add 2,000 hotel rooms a year to its stock in a bid to meet demand.

Havana, Cuba
Havana, Cuba

That was before Donald Trump came along; a man, who, on the campaign trail, promised to get tough on Cuba if he entered the White House.

He did, and last week the President made good on that promise by reversing some (but not all) of his predecessor's restrictions on travel and trade.

The result will likely have a cooling effect on tourism in Cuba.

Diplomatic relations between the two nations will remain and so will commercial flights – but Trump's administration will more tightly control visits to Cuba by US citizens.

Washington will also restrict US companies from doing business with the Cuban military, which has many commercial interests on the island.

“The new policy will empower the Cuban people,” a White House official said last week. “It does not target the Cuban people but the measures are designed to restrict the flow of money to oppressive elements of the Cuban regime.”

A man smokes a cigar in Cuba.
A man smokes a cigar in Cuba.

It’s worth noting that Obama did not simply open the floodgates for US citizens to jet off to Cuba for a sunny holiday – there were conditions. Trips had to fit into one of 12 categories – such as educational, humanitarian or sporting – if US citizens wanted to visit the Caribbean island.

However, Obama did relax so-called “people-to-people travel”, allowing Americans to travel individually to Cuba on an honour system without being part of an organised group.

That permission was repealed by the Trump Administration last Friday.

This means that the situation could revert to what it was before: "US citizens travelling in licensed groups with an American tour leader, and counterpart Cuban guide, on state-owned coaches, staying in state-run hotels, and following an itinerary approved by the Cuban government,” said Claire Boobbyer, a Cuba travel expert with Telegraph Travel in the UK.

It's not clear whether other individual (as opposed to group) travel will be banned, and the changes are not expected to take effect for a number of months.

Homestays, private restaurants and hip bars have proliferated in Cuba since Raúl Castro kickstarted the island’s moribund economy in late 2010, and many Cubans will be concerned about the rollback on individual travel. 

“With the arrival of four million tourists last year – more than 600,000 of them Americans – these places are flourishing,” said Boobbyer. 

The homestay business was also boosted by the arrival of Airbnb in Cuba in 2015, which recently announced that Cubans had received $40m through the home-sharing site.

The new restrictions are not bad news for everyone, however. Indeed, Boobbyer believes UK tourists could actually benefit from Trump’s latest policy.

“Hotels will probably be less busy and prices will most likely come down,” she said. “Especially at places like the $440-per-night Kempinski, which opened only a week ago.” 

Kempinski says it expects a significant proportion of guests staying at Gran Hotel Manzana to come from Europe and other markets that are likely to be unaffected by Trump’s policies.

“We will continue to monitor any regulatory changes closely, and make appropriate adjustments as and when required,” said Eva-Maria Panzer, corporate director public relations.

“In the meantime, we are confident in our ability to continue offering high quality services to all of our guests visiting Cuba from around the world.”


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