CHTA report about opening of Cuba: “Impact on cruise industry will be immediate”POSTED: 07/10/15 8:19 PM
Will cruise lines drop St. Maarten for Cuba? Photo today / Milton Pieters
St. Maarten – “Relatively little effort has been spent on turning the most tourism dependent region in the world into the most tourism competent,” the Caribbean Hotel and Tourism Association writes in a report about the emerging tourism giant Cuba. In spite of this rather sour observation, the CHTA remains optimistic: “The coming Cuban disruption just might be the tonic that the countries need individually and collectively to build the kind of strategy approaches to tourism development that will yield sustainable results for its citizens.”
Relatively good news for St. Maarten is the CHTA’s expectation that “islands and countries nearest to Cuba will feel the greatest ripple effects.” The association says it would be wise for these countries to begin planning ways to mitigate those effects now.
“For other destinations in the Caribbean the consequences might be more muted, but in the end the total Caribbean travel landscape will be changed forever,” the report states.
Many countries in the region have already experienced a decline in market share due to the emerging tourism market in Cuba. The CHTA says that the value to Cuba of its proximity to the United States for land-based visitors cannot be overstated. It mentions the US Virgin Islands, Puerto Rico, Belize, the Bahamas, the Cayman Islands and to a lesser extent Cancun and Jamaica as destinations that have been the beneficiaries of spontaneous and impulse vacation decisions. When Cuba is added to the mix US travelers in the Northeast, Midwest and South will suddenly have a very large and varied additional option to choose from. That will go at the expense of other destinations.
The numbers mentioned in the report are sobering. Last year, Cuba received 3 million stopovers – 1.1 million from Canada, 730,000 from Europe and 1 million from other countries.
“Cuba is already one of the largest tourism destinations in the Caribbean, second only to the Dominican Republic in visitor arrivals,” the report notes. The Dominican Republic recorded 5.1 million arrivals last year; nearly 1.8 million of them came from the United States.
“Countries whose focus has been on the United States as their primary source market (like St. Maarten – ed.) who have not felt any competition from Cuba (…) and who might have been lulled into believing that Cuba is a greenhorn at tourism, will be surprised how sophisticated and effective the Cuban marketing machine has become,” the report warns.
The Dominican Republic was never closed to the American market. “Most people now come to believe that the effects of Cuba on Caribbean tourism will be unprecedented,” the report states.
In 2014, Cuba’s tourism revenue was $2.6 billion. The country expects to increase this revenue stream to $6 billion in the future. That ambition will go at the expense of other destinations – unless the market grows.
Interesting for St. Maarten is the CHTA’s view on the effect Cuba will have on the cruise industry. “There is general agreement that the opening of Cuba will have an immediate impact on the cruise industry,” the report states. Cuba will present itself as a more diversified destination.
More than 20 million cruise tourists visit the Caribbean every year. “The likelihood that cruise lines will drop some existing ports to accommodate Cuba port visits is real,” according to the CHTA. Cuba’s proximity to the US mainland will make it easy to include the destination in itineraries to the Bahamas, the Cayman Islands and Jamaica.
“It seems inevitable that including Cuba in multi-destination cruises nearer to the United states, with the attendant savings in fuel costs, will negatively impact southern Caribbean destinations,” the report states.
The association says that the opening of Cuba will also impact the investment outlook for the wider Caribbean. In 2013 alone, Cuba recorded $800 million in hotel-related investments. The CHTA’s conclusion is obvious: “The Caribbean and its industry will find itself not only competing for American tourists but also for investment dollars.”
The CHTA remains however optimistic: “The most disruptive effect of Cuba on Caribbean tourism might not be the introduction of new competition for US travelers in the region. Instead, the most disruptive effect is Cuba’s clear lesson for the rest of the region that tourism development with its myriad opportunities for linkages is the most viable and sustainable economic development tool for the region.”