In a world gripped by deflation, it is an amazing paradox that Cuba’s communist isolation could give birth to such sought after qualities in capitalism: growth and visibility.
And I don’t mean the mundane above trend growth that is frequently described in CAGR terms (cumulative average growth rate). I’m referring to the face peeling, dorm room riff kind of growth – like 500% within a seven to ten year period, which is the visibility many experts are projecting for the industry. The island nation has only one industry, travel and tourism, capable of delivering top-line GDP growth anytime in the near future, and the Castro’s are gearing up to meet demand.
If you exclude Cuban-Americans traveling to Cuba, only about 150,000 Americans (non Cuban-American residing in America) traveled to Cuba in 2015. By comparison, about 21 million Americans visited Mexico last year – and Delaware, that wedge of industrial landscape between New Jersey and Maryland, saw 7.3 million visitors.
If you are among the affluent who travel in search of adventure, seclusion or authenticity, Cuba is the most interesting place in the world today. Most people don’t realize that Cuba’s coastline is 40% longer than Florida’s. And even fewer people understand that Cuba’s coastline is virtually untouched by tower condo buildings, asphalt parking lots and fried Twinkie vendors.
Judging by the current hotel-resort pipeline (all owned by the Cuban government), luxury travelers with a $1,000/day spending footprint are the object of President Castro’s favor. Yachting infrastructure, five-star hotels and upgrades to existing all-inclusive resorts are the investment focus for Cuba and its foreign partners.
Reverse Nostalgia
Perhaps even more powerful than Cuba’s astounding growth potential is the presence of a rare phenomenon: reverse nostalgia. Reverse nostalgia is the feeling you get when you realize you are in a moment of time that you will later feel nostalgic for. In Cuba, this puts emotional demands on visitors and draws them into an active relationship with the place – much like a work of art does. It has the potential to remind us that we might be alive for reasons other than consumption.
Consider the two-sided coin of America’s style of travel. The beige vinyl siding side contains masses of cruise passengers but the local flavor – the quality side of the coin – is by definition too often ruined by the presence of those masses of tourists and the infrastructure that supports crass consumerism.
It’s hard to think of yourself as a true individual standing at Puerto Rico’s main cruise ship terminal as a throng of thousands line up for Subway sandwiches and doughnuts in a strip-mall style waterfront – an extended exhibition of Puerto Rico’s least attractive characteristics built to suit the needs of debt servicing capacity rather than to expose travelers to an encounter with the texture of an exotic island.
Cuba’s size and complex history – not to mention the draw for people looking to participate alongside the mystery as it emerges – may deliver both large volumes of tourists and wealthy five-star travelers in search of an authentic experience. It could take decades to spoil the unspoiledness millions of visitors will seek to experience. Cuba is like an endangered species possessing the DNA of fantastical growth – and Castro wants to offer the tasty last bite to the highest paying demographic he can find.
