Sunday, July 27, 2008

U.S.-Cuba tourism could shake up region

U.S.-Cuba tourism could shake up region
Posted on Sun, Jul. 27, 2008

For years, I have thought that Mexico and most Caribbean countries want
Cuba to remain a dictatorship subject to U.S. travel sanctions for as
long as possible, because an eventual opening of U.S. travel to Cuba
would badly hurt their own tourism industries.

But now, I'm beginning to wonder whether that's true for all of Cuba's

After reading a new study by the International Monetary Fund, I can't
help but conclude that Mexico would stand a lot to lose by an opening of
U.S. tourism to Cuba, but many Caribbean islands would not suffer at
all. On the contrary, the study says overall tourism to the Caribbean
would increase by up to 11 percent.

The study, ''Vacation Over: Implications for the Caribbean of Opening
U.S. Cuban Tourism,'' was published by the IMF as a ''working paper'' by
its economist, Rafael Romeu.

It comes at a time when an opening of U.S. travel to Cuba looks
increasingly plausible in the near future. Democratic U.S. presidential
candidate Barack Obama is vowing to relax U.S. travel restrictions on
Cuban Americans if he is elected. And, independently of U.S. policy,
Cuba's ruling gerontocracy is not likely to be able to maintain the
status quo for many years -- if anything else because President Raúl
Castro is 76, and his No. 2, José Ramón Machado Ventura, is 77.

According to the IMF study, ''an opening of Cuba to U.S. tourism would
represent a seismic shift in the Caribbean's tourism industry,'' and
would ``increase overall arrivals to the Caribbean.''

This is because there would be a massive surge in U.S. tourism to Cuba,
which would overwhelm Cuba's hotel room capacity and drive Canadian and
European tourism currently vacationing in Cuba to be redirected to
neighboring countries.

As a result, ''the region would enjoy a period of sustained demand,'' it
says. ``In the wake of this change, some countries would potentially
stand to lose U.S. tourists but would gain new non-U.S. tourists.''

Currently, the biggest tourism destinations in the Caribbean, in
addition to Puerto Rico, are the Dominican Republic, with 2.2 million
foreign visitors a year; Mexico's resort of Cancún, with nearly 2
million tourists; the Bahamas, with 1.4 million tourists; Cuba, with 1.3
million, and Jamaica, with 1.2 million. The figures reflect annual
arrivals between 2000 and 2004, and have since gone up somewhat, Romeu says.

But an opening of U.S. tourism to Cuba would shake this mix immediately,
because an estimated 3 million to 3.5 million American tourists would
flock to Cuba, the study says.

Much of it would be because traveling to Cuba -- in addition to being a
novelty -- would become substantially cheaper. Currently, the cost of
traveling from the U.S. to Cuba for Cuban Americans and others exempted
from travel restrictions is equivalent to that of traveling to Australia.

According to the study, there would be winners and losers from an
opening of U.S. tourism to Cuba:

• Mexico's resort of Cancún, which relies heavily on U.S. tourists,
would be a net loser. It would lose 614,000 American tourists, while it
would gain only 93,000 non-U.S. tourists.

• The Bahamas, which also relies heavily on U.S. tourists, would lose
499,000 U.S. tourists, while gaining 36,000 non-U.S. tourists.

• The Dominican Republic, which has a highly diversified tourism base,
would be a net winner. It would lose 318,000 American tourists, while
gaining nearly 400,000 non-U.S. tourists.

• Smaller islands such as Martinique, Montserrat, Antigua and Barbuda,
Barbados and other countries with strong ties to European countries
would also be net winners. Barbados, for instance, would lose 48,000
American tourists, but would win 64,000 non U.S, tourists.

''It won't be a disaster for many countries, because many of them will
more than offset the loss of U.S. tourists with a greater influx of
European and Canadian tourists, with whose countries they have age-old
cultural ties,'' Romeu told me in an interview.

My opinion: Interesting stuff. I don't know whether Mexico -- the
biggest loser in an eventual opening of U.S. tourism to Cuba -- is
currently cozying up with Cuba's dictatorship because it wants to
maintain the status quo for as long as possible.

But I wouldn't be surprised if there is a link between tourism and
politics in the Caribbean -- which would explain a lot of things that
sometimes seem hard to understand.

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