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An Open Cuba & It’s Effects on Caribbean Macro Tourism.

The United States has recently started opening up Cuba to U.S. tourists following the bridging of relations between the two close-proximity former rival nations.

What this means for the Caribbean region and its tourism industries remains to be seen.

The new agreement between these nations will allow commercial flights between the two countries starting next autumn. Several airline companies have thrown their hat into the ring including American Airlines, Jet Blue and Delta. The airlines are not the only players getting into the mix in Cuba.US-based Starwood Hotels have inked an agreement that will place them in direct control of several hotel properties in the heart of the Cuban capital of Havana and AirBnB has been conducting business in Cuba since last year. Additionally, Carnival Cruisesis the first American cruise operator to visit Cuba in over fifty years.

Here in the Cayman Islands folks at the Department of Tourism have observed the situation with trepidation and have stated that it is still much too early in the process to judge what, if any, effect this opening of our northerly neighbor will mean to the nation’s tourism bottom line.Tourism figures for the Cayman Islands show that since the normalization of relations with Cuba occurred the growth of stay-over tourists has seen a slight dip. Last year Cayman had roughly +/- 0.76 % growth in stopover stays. This is the lowest rate of growth since the recession in 2009.

At the heart of the issue is a basic question: Will Cuba’s bigstep back into the regional tourism scene spurn growth in tourism to the region en masse or will it begin to glean visitors from other Caribbean destinations and, thus, take US dollars away from those locales? Cuba’s economy is currently massively under-invested in. Many wonder if this will change in the coming years once Americans begin to perceive Cuba as a “safe bet” and begin investing there.Those monitoring the situation closely think that if Cuba joins the World Bank -development in tourism-based projects is going to be one of the main focuses of the initial lending.

Cuba emerging as a destination tourism powerhouse is not without its challenges. Many social, political and economic problems exist in the impoverished island nation. A big step in the process will be dealing with the still-in-place trade embargo that exists with the United States. This will mean dealing with all of the property and assents that were expropriated during the Castro-led revolution, bringing the country’s infrastructure back up to snuff and curbing the once-systemic corruption. Moreover, moving their economy to one based predominantly in free enterprise will be a slow and arduous task as their financial system is still run by-and-large by the Cuban government.

One thing is glaringly clear here, a newly opened Cuba will have an impact on the tourism industry in the Caribbean. Just how big of a role, and in what way, is largely up to the policy-makers and citizens in Cuba. Will they seek to re-make Cuba into the bustling vacation destination it was in the 40s and 50s or will they step more gingerly into the scene? Those of us heavily invested in tourism here in Cayman, as well as in other neighboring nations, will be watching the situation keenly and perhaps with bated breath.

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