Cuba’s hope for U.S. travel boom hitting road block with charter flights declining

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Typical crumbling apartment building and vintage auto, Havana. (Larry Luxner)

Editor’s Note: This is part of a series of stories on Caribbean tourism. Read the previous stories here.

Cuba is no longer off-limits for all Americans, yet those who expected the Obama administration’s relaxed people-to-people travel regulations to open the floodgates of “responsible” U.S. tourism to Cuba have been largely disappointed.

Even so, Canadians, Europeans and now Russians continue to flock to the Caribbean island  — boding well for 2013 arrival numbers.

Cuban Tourism Minister Manuel Marrero said his country will receive a record three million tourists this year, representing an eight percent increase over the 2.84 million who visited in 2012.

The first two months of 2013 have shown the highest figures since 2008, with a total of 602,862 foreign tourists arriving in January and February alone. Leading sources of tourism are Canada, Great Britain, Germany and Italy, followed by Argentina, Brazil, China and Russia (the last jumping from 37,000 in 2009 to 87,000 in 2012).

Spain, however, has fallen to 10th place in spite of the growing investments and projects conducted by Spanish companies. As recently as 2006, Spain was vying for first place with Canada in terms of tourists in Cuba, but a continuing economic crisis at home — its jobless rate now stands at 27.2 percent — has taken its toll on Spanish tourism to Cuba.

Nevertheless, Spain’s Grupo Sol Meliá is  operating 24 hotels in Cuba, and other Spanish companies will complete four major resorts in 2013.

Afternoon glow of restored buildings along Havana's seaside Malecón.
Afternoon glow of restored buildings along Havana’s seaside Malecón. (Larry Luxner)

Tourism is now Cuba’s second-largest source of foreign revenue after the export of technical and professional services, bringing in an estimated $2.1 billion a year.

To accommodate the flood of visitors, Cuba plans on boosting its hotel capacity to more than 78,000 rooms by 2020, up from 58,434 rooms at present and only 40,410 back in 2002. That’s the word from Marrero, who spoke during the recent 33rd Feria Internacional de Turismo, an annual event that ranks as the island’s most important gathering of tourism professionals.

Tourists with dollars browse through trinkets at the flea market in Old Havana. (Larry Luxner)
Tourists with dollars browse through trinkets at the flea market in Old Havana. (Larry Luxner)

FITCuba 2013, held May 7-9 at Varadero’s Plaza de las Américas convention center, attracted hundreds of travel agents from more than 50 countries including a fairly large delegation from Brazil — thanks to a recent agreement between the Cuban government and Brazil’s Institute of Tourism (Embratur).

“Cuba is a country of natural beauty, vast cultural and historical heritages [and is] one of the safest countries in the world, with a hospitable and educated people,” Marrero told delegates attending the annual travel trade fair.

Varadero was, and remains, the crown jewel of Cuba’s tourism attractions along with Havana. Its airport receives 10 flights a day and 1.4 million airline passengers a year. Varadero alone has 55 hotels containing 23,614 rooms. In 2011, its resorts averaged 63 percent occupancy and generated $850 million in tourism income for the island.

Of Cuba’s 335 hotels, 71 percent are along beaches, 23 percent  in cities and 2 percent in natural reserves. Likewise, 65 percent of the 58,434 rooms in Cuba’s hotel inventory are in 4- and 5-star properties. recently recognized several Cuban resorts in its listing of “romantic lodges in the Caribbean,” including Sol Cayo Guillermo in the province of Ciego de Avila; Meliá Buenavista in Villa Clara, and Paradisus Río de Oro, in Holguín.

The island also is seeing an explosion in the number of privately run bed-and-breakfast inns, thanks to the relaxation of rules governing private enterprise.

Artwork for sale at Parque de 23, a tourist market in Havana’s Vedado district. (Larry Luxner)
Artwork for sale at Parque de 23, a tourist market in Havana’s Vedado district. (Larry Luxner)

Cubans themselves are beginning to cash in on the growing tourism market. One local sales agent in Havana recently told AFP news agency that in just one day, he sold $53,000 in reservations to Cuban nationals — something unimaginable five years ago.

Since January, Cuba’s Ministry of Tourism has been conducting major marketing campaigns in Madrid, Rome, Milan, Río de Janeiro and Moscow, seeking to open new markets and regain lost ground in others.

At the same time, Cuba is planning to start its first joint cruise experience in association with Cyprus-based Louis Cruises. The 960-passenger Louis Cristal will operate during the winter season (December-March), calling on Havana, Cayo Coco, Holguín, Cienfuegos, Santiago de Cuba and Montego Bay; packages will be aimed at the European market.

While Cuban-American exiles are visiting the island of their birth in record numbers, relatively few Americans of non-Cuban origin have signed onto the various “people-to-people” programs now being offered by specialized travel agencies.

On April 24, Los Angeles-based People to People Ambassador Programs said it would begin offering adult travel programs to Cuba this July. In response to high demand from the organization’s alumni of career professionals, it acquired a travel operator P2P license from the Treasury Department’s Office of Foreign Assets Control, which allows U.S. citizens to legally visit Cuba.

Yet the logistics of actually getting to Cuba from the United States are complicated. A weekly flight between Los Angeles and Havana made its last trip in early February — the latest victim of a sharp reduction in U.S.-Cuba charter flights that industry officials blame on vastly overblown predictions of a boom in demand.

Cuba Travel Services of Long Beach, run by Michael Zuccato, announced it had cancelled its once-a-week, nonstop flight after the chartered United jetliner returned to LAX because of a lack of passengers.

The month before, Miami-based ABC Charters and Xael Charters announced they would cancel two Tampa-to-Cuba flights. ABC shut down its weekly flight to Holguín as of Feb. 28, while Xael ended its one flight to Havana per week on Feb. 14.

About 45 charter flights now operate weekly from the United States to Cuba, down from nearly 60 last September. Back in 2011, more than a dozen “gateway” cities were authorized to offer direct charter air service to Cuba, including Atlanta, Baltimore, Chicago, Dallas-Fort Worth, Pittsburgh, Fort Lauderdale, New Orleans and Tampa.

But only a handful of those cities ever got Cuba-bound flights off the ground. San Juan, Puerto Rico, did have a service to Cuba but cancelled due to weak demand, and efforts to launch service from BWI fell apart before they ever started.

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