Why Cuba Could Dominate The Niche Adventure Travel Industry

Cuba is what the travel industry would love to be if it could.

This is because adventure travel is the sweetest spot of the $2.5 trillion global travel industry, and Cuba’s natural and human qualities together make it the most interesting place in the world in terms of visibility for growth in this niche.

According to the Adventure Travel Trade Association’s (AATA) Global Report on Adventure Tourism (2014), adventure tourism, valued at $263 billion annually, is one of the fastest growing categories of tourism that attracts high value customers, supports local economies, and encourages sustainable practices.

The U.S sent more than 20 million American tourists to Mexico last year, while only about 250,000 (non Cuban-Americans) went to Cuba over the same period. Cuba, the largest island in the Caribbean, is far from becoming a mass market destination like Mexico or the Dominican Republic, yet there will be a lot of growth for smaller outfits to take advantage of Cuba’s attractiveness as one of the world’s major emerging adventure tourism destinations.

The ATTA defines a trip as “adventure travel” if it involves two of the following three elements, with the core of an adventure trip involving all three:

• connection with nature
• interaction with culture
• a physical activity

There is a some nuance to understanding Cuba’s potential for meeting what appears to unlimited growth in a key travel and tourism niche. First, there are no Western development banking institutions active in Cuba today because certain aspects of the U.S. embargo against Cuba prevent those institutions from operating there. Presently, the Chinese development banks are on the scene, but there has yet to be any great push from the Chinese to invest in Cuba’s travel and tourism sector beyond a few projects.

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Second, the Cuban government’s slow approval process and 50% ownership requirement for foreign joint ventures places barriers to capital formation in the island nation. Even if all the barriers to investment were to disappear today, it would take a decade for Cuba to absorb the $50 billion of investment (Cuba Journal estimate) needed to support a travel and tourism industry that is orders of magnitude larger than it is today.

In the meantime, the dynamism in Cuba’s travel and tourism industry will remain in the higher-value niche segment of adventure travel until the structural barriers to growth in mass tourism get resolved.

Here are the main reasons why Cuba could dominate the niche adventure travel industry one day:

1. Proximity to the U.S.: Cuba is just a few miles from the largest and richest source of adventures travelers in the world;
2. Cuba’s coastline – 40% longer than Florida’s – remains pristine and will attract a lot of yachting, diving and secluded sunbathing that the other island nations in the Caribbean either do not have or lost due to environmental degradation/over construction;
3. Cuba has more beaches, historic architecture, dancers, singers, rum, art, cigars, protected ecosystems, coral reefs, UNESCO World Heritage Sites and history than any other island in the Caribbean;
4. Cuba is perhaps the most musical (and prone to dance) nation in the world;
5. Cuba’s Alejandro de Humboldt National Park (AHNP) (Spanish: Parque Nacional Alejandro de Humboldt) is the largest and best-conserved remnant of forested mountain ecosystems in the Caribbean and is a UNESCO World Heritage Site due to its size, altitude range, complex lithology, landform diversity, and wealth of endemic flora and fauna;
6. Cuba’s Jardines de la Reina (Gardens of the Queen) is an archipelago in the southern part of the island nation, near the provinces of Camagüey and Ciego de Ávila – and by far the best diving in the Caribbean and is among the best in the world;
7. The Cubans themselves are considered to be the highest educated society in Latin America;
8. Cuba is among the safest places in the world for Americans to travel;