By Alex Zozaya, CEO of Apple Leisure Group
History was recently made when American Airlines and Jet Blue became the first U.S. airlines to land passenger flights in Havana in more than 50 years. More U.S. airlines are expected to launch regularly scheduled flights to Cuba’s capital this month as well. While this was another significant step forward, it remains to be seen how U.S.-Cuba relations will manifest with the recent passing of Fidel Castro and under the new presidential administration.
Donald Trump is unpredictable, and how he chooses to handle the United States’ relationship with Cuba is a serious concern of mine. If he decides to reverse the positive progress that President Obama made in this regard over the last two years, Americans may not be allowed to travel to Cuba whatsoever. It is my hope that relations keep moving forward under the new administration and that the embargo is lifted soon.
Regardless of these uncertainties, travelers and investors are likely to continue to have the Caribbean island on their radar in 2017. But before they can take full advantage of the country’s offerings and allure, more changes must happen.
Room to Grow
As we know, the U.S. government does not permit leisure travel to Cuba; however, I believe it’s only a matter of time until that restriction is lifted. This presents the question: can the island support a sudden spike in visitors?
At the moment, Cuba has a limited number of hotel rooms and faces infrastructure challenges. Hospitality leaders are already looking to renovate existing properties or build new hotels to meet this imminent demand, but a lot is dependent on the loosening of current business restrictions, particularly on the part of the Cuban government.
Meanwhile, the Cuban government is also aware of their own growth potential. GAESA, the largest military-run conglomerate on the island, plans on introducing 30,000 more rooms, most of which will be in all-inclusive beach resorts by 2030, according to Fox News.
Through Apple Leisure Group’s subsidiary AMResorts, I’ve seen firsthand that the all-inclusive industry attracts a diverse mix of travelers—one being the luxury-minded traveler.
Although high-end, luxury destinations in Cuba are limited at the moment, I foresee adventurous American travelers willing to trade the comforts of traditional amenities for being among the first to experience the uniqueness of the island. However, the reality is that the excitement will likely subside, and some travelers will not be as flexible. What then?
Going forward, modern, sustainable accommodations will be needed to cater to more high-end U.S. travelers. To speed up the entry of these types of hotels into this new market, U.S. companies may choose to reflag existing properties while making aesthetic updates. Others may develop new, self-contained resort destinations on the island, pending government allowances.
Variety will be key. In order to cater to the diverse travelers entering the market, we can expect to see various hotel sectors beginning to emerge on the island: from limited-service to extended-stay and ultra-luxury.
The potential for opportunity remains high. A record-breaking 1 million travelers visited Cuba in the first three months of 2016. The growth of travel to Cuba could easily rival that seen in the Dominican Republic or Mexico’s Riviera Maya.
Cuban businesses and workers are well-prepared to welcome American travelers, as they already have years of experience catering to tourists from Europe, Canada and Latin America. And the increase in visitors to the island nation is not expected to come at the expense of business to other tourist destinations, mainly because the overall number of Americans traveling for pleasure to the Caribbean continues to grow every year.
If the trend for increasingly open travel and business relations continues between the United States and Cuba, more hotel companies will likely step up and invest in the Cuban market, its people and its future. Cuba holds incredible potential not only as a unique tropical destination, but also as a crucial opportunity for U.S. travelers and hoteliers to make their mark in this burgeoning market.