The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Cuba’s opening will immediately threaten more than 20 per cent of the Bahamas’ stopover visitor market, it has been revealed, amid calls for a ‘tourism trade agreement’ with the US to mitigate the impact of its ‘diplomatic reset’ with Havana.

The implications for the Bahamas’ number one industry, and other Caribbean nations, are discussed at length by a newly-released Caribbean Hotel and Tourism Association (CHTA) paper, which describes Cuba’s opening as “the biggest and most disruptive pebble to be dropped into the Caribbean pool in 50 years”.

The CHTA paper, in particular, warns that Cuba’s proximity to the US will act as an immediate draw for Florida’s ‘impulse’ traveller market, which currently gravitates to the Bahamas for short-term stopover vacations.

“As it relates to the state of Florida as a source market, Cuba’s location will draw the attention of those travellers who have traditionally travelled spontaneously and impulsively to the Bahamas, a country which has relied on Florida for generating over 20 per cent of its arrivals for some time,” the CHTA paper warned.

“A not insignificant proportion of those arrivals from Florida to the Bahamas also results from surreptitious travel by US citizens to Cuba, and the airlines benefiting from those transactions will likely lose out.”

The Bahamas Hotel and Tourism Association (BHTA) has already shown itself to be alive to the implications of the thaw in US-Cuba relations, and the eventual full opening of the latter’s tourism market to American visitors - a base that accounts traditionally for 80-85 per cent of this nation’s total stopover visitors.

It earlier this year formed a ‘Cuba Commission’, with members including BHTA president, Stuart Bowe; British Colonial Hilton general manager, Rui Domingues; Nassau Airport Development Company (NAD) chief, Vernice Walkine; and KPMG accountant, Charlene Lewis-Small.

The Commission’s aim, according to BHTA Board meeting minutes, is: “With Cuba coming on line, the BHTA would like to create a committee that would examine the potential impact Cuba would have on the Bahamas as it pertains to our tourism economy, and also the opportunities to improve areas of our product and service that need enhancing in order to ensure competitiveness.”

The CHTA paper, meanwhile, warned that the value of Cuba’s proximity to the US for stopover visitors “cannot be overstated”.

It added: “Countries such as the US Virgin Islands, Puerto Rico, Belize, the Bahamas and the Cayman Islands, and to a lesser extent destinations such as Cancun and Jamaica, have been beneficiaries of spontaneous and impulse vacation decisions, a growth area aided by online vacation offers and instant booking technology applications.

“According to the global marketing communications firm, MMGY, consumer research undertaken earlier this year shows that 20 per cent of all vacations were last-minute vacations.

“Soon the very large and varied destination of Cuba will be added to the list of options in the consideration set for last-minute and impulse vacations by US travellers, particularly those in the north-east, mid-west and south.”

The US north-east, alongside Florida, is the Bahamas’ other key stopover visitor market. And not even the cruise ship sector will be immune from the Cuba effect.

“The likelihood that cruise lines will drop some existing ports to accommodate Cuba port visits is real, and the proximity of Cuba to the US mainland can allow for Cuba to be easily added to a schedule that can impact itineraries to near markets such as the Bahamas, the Cayman Islands, and Jamaica,” the CHTA paper warned.

All segments of the Bahamian tourism base will thus be under instant, sustained pressure once Cuba fully opens up to US tourists.

“The CHTA expects that those islands and countries nearest to Cuba will feel the greatest ripple effects, and believes it would be wise for them to begin planning ways to mitigate those effects now,” the CHTA added.

The Bahamas, via the BHTA, has already adopted such an approach, and the CHTA suggested that time was still on this destination’s side.

A full opening of Cuba to US tourists is still likely to be some way off. That is because Congressional approval, always a difficult ask, is required to completely lift the US trade embargo. And then there are the outstanding multi-billion dollar reparations claims by US companies for assets seized by the Castro regime that have to be addressed.

“The Caribbean, the most tourism dependent region in the world, could use a good shaking up,” the CHTA paper said. “For decades, with few exceptions, it has relied on its natural advantages of sun, sand, sea, welcoming populations and, more than anything else, its relative proximity to the United States, the largest economy on earth, for much of its success.

“For decades, many Caribbean governments appear to have grudgingly accepted the employment and foreign exchange benefits delivered by their tourism economies but have not provided the kind of attention and support to tourism that could further reduce the crushingly high and debilitating levels of unemployment and national debt which often plague their countries.

“Relatively little effort has been spent on turning the most tourism dependent region in the world into the most tourism competent. The coming Cuban disruption just might be the tonic that the countries need, individually and collectively, to build the kind of strategic approaches to tourism development that will yield sustainable results for its citizens.”

Emphasising that Cuba’s opening was as much an opportunity as a challenge for the Bahamas and other Caribbean nations, the CHTA said much would depend on whether the region could grow its tourism arrivals market as opposed to splitting it with the Communist nation.

As a result, it is calling for a Caribbean Basin Tourism Initiative (CBTI) to be agreed between the region and the US as a means of stimulating trade, investment and economic growth via the industry.

It would be modelled after the existing Caribbean Basin Initiative (CBI), the one-way trade preferences regime designed to boost commodities exports from the region into the US.

Frank Comito, the CHTA’s chief executive and director-general, said in a statement: “Taking advantage of the opportunities which are presented will require leadership and engagement by all stakeholders, and in our view the United States must return to the stewardship role it played in the region’s economic development several decades ago.

“The normalisation of US-Cuba relations can be the catalyst for advancing a new Caribbean tourism and economic development agenda.”

Mr Comito, who held the same post with the BHTA, added: “CHTA presents to the region’s public and private sector leaders, the US International Trade Commission and, by extension, to the US government, a single recommendation: The creation of a Caribbean Basin Tourism Initiative (CBTI). This would recognise tourism services as a way in which to support both Cuba and the region’s development.”