Cuba still off-limits to most American tourists

Will 2014 be the year Washington finally takes Cuba off the State Department list of “terrorist-supporting states” which also includes Iran, Sudan and Syria?

Possibly, say veteran Cuba watchers — but don’t expect the White House to make any other significant moves this year to improve relations, especially if Maryland resident and U.S. government subcontractor Alan Gross remains locked up in his Havana jail cell.

The much-hyped handshake between Presidents Barack Obama and Raúl Castro (above) during Nelson Mandela’s funeral in South Africa probably won’t convince Congress to abolish the embargo that makes most U.S. travel to the island illegal.

That, of course, would energize Cuba’s tourism sector more than any single development in the last 50 years. The irony is that after two decades of steady growth, tourism in Cuba appears to be stagnating — even as legal U.S. travel to the island keeps on growing, reaching nearly 600,000 visitors in 2013.

About 2.54 million tourists arrived during the first 11 months of 2013, according to year-end data released by Cuba’s Oficina Nacional de Estadísticas (ONE).  In November, arrivals spiked by 7 percent to 234,266, but the January-November 2013 period still showed a drop of 0.4 percent from the same period in 2012. This means Cuba did not reach its much-stated goal of 3 million tourists for 2013, but rather finished the year at around 2.8 million foreign visitors, nearly identical to the number who came to Cuba in 2012.

By far, the most important source market for tourists to Cuba is Canada, which accounts for 38.9 percent of all visitors to the island. In 2013, Canadian tourism picked up by 2.9 percent; other strong-performing source markets were Colombia (up 5.8 percent), Germany (up 6 percent), Mexico (up 9.4 percent), Venezuela (up 23 percent) and Chile (up 31 percent).

Yet some of Cuba’s most important traditional markets sent fewer tourists to Cuba last year as economic problems continue to plague the 28-member European Union. These include Great Britain (down 2.9% last year); France (down  percent), Italy (down 8.8 percent) and Spain (down 12.1 percent).

The big surprise is the United States, which ONE lists in the “other” category. It said the number of visitors from this category fell by 3.6 percent for the first 11 months of 2013, but Havana Consulting Group suggests exactly the opposite.

President and CEO Emilio Morales said a survey conducted by his Miami-based consulting firm shows that as of mid-December, 569,232 U.S. passengers had traveled to the island — mostly on charter flights from Miami, Fort Lauderdale-Hollywood and Tampa — compared to 573,985 in 2012. Of the 2013 total, 471,994 were Cuban-American exiles going to visit family and friends on the island.

The remaining 97,238 were U.S. citizens traveling to Cuba on people-to-people programs, humanitarian licenses, government business or for other purposes. According to Morales, 87 percent of those surveyed travel at least once a year to Cuba, 3.1 percent travel quarterly, 1.8 percent travel every other month and 1.3 percent travel monthly.

The average U.S. visitor stays in Cuba five to seven days, the survey showed, and 36.3 percent of them visit tourist resorts. Of the beachgoers, 54.9 percent visit Varadero — Cuba’s largest and most popular beach destination — while 21.8 percent go to Guardalavaca in eastern Holguín province, and 13.4 percent visit Cayo Santa María, along Cuba’s northern coast.

Furthermore, some 80 percent of beach visitors said they stay in hotels. One-third of them rent cars, and 17.9 percent hire government-owned taxis.

The study estimates that Cuban-Americans visiting the island spend around $665 million a year in Cuba, though total remittances to Cuba reached a record $2.77 billion in 2013, nearly 6.6% more than the previous year. And those remittances may break another record, Morales says.

“In 2014, the $3 billion barrier for cash remittances could be broken for the first time,” he said in a press release. “Everything depends on the next liberating measures of the Cuban government.”

The most recent of those measures, which took effect Jan. 1, 2014, allow Cubans to buy new and used cars from the state without special permission. But markups of 400 percent or more have only served to frustrate average people. Those who don’t receive money from their families in South Florida, for example, have little hope of ever being able to buy a Peugeot 206 model for $91,000 — let alone a Peugeot 508 for $262,000 — especially considering that the average wage in Cuba is around $20 a month.

Relations between the United States and Cuba are better than they were a year ago. In November, two officials from the Cuban Interests Section visited Miami to meet with companies that handle Cuba travel — an uncommon trip because the State Department rarely allows Cuban diplomats to leave the Washington area. Bbilateral talks regarding direct mail service  and migration issues are taking place, and even more importantly, the Castro regime refused to give NSA whistleblower Edward Snowden safe haven in Cuba, pleasing Obama administration officials.

And, of course, there’s the famous Obama-Raúl handshake in Johannesburg.

But problems remain for U.S. citizens traveling to Cuba legally. On Nov. 26, the Cuban Interests Section was forced to temporarily suspend the issuance of visas after M&T Bank said it had dropped all business with foreign missions in the United States, and Cuba couldn’t find a replacement. Two weeks later, the mission restored those services, but travel companies remain concerned about a repeat stoppage since Havana’s reinstatement of consular services is only on a temporary basis, until Feb. 17. “There’s a lot of money at stake,” Peggy Goldman, president of Friendly Planet Travel, which organizes people-to-people tours, told CubaNews. “In the worst-case scenario, [the Cubans] can make it possible to get the visas somewhere else and not in Washington, D.C. Dealing with money because of the embargo is a headache.”

William Hauf, president of Island Travel & Tours, runs nine flights a week to Cuba from Tampa and Miami. He said a bank in California recently closed down his Cuba-related account after bank employees made mistakes in some transactions.

“They decided to get rid of me, instead of trying to make sure their people are well-informed and well-trained,” Hauf told the newsletter. “The banks in the United States are paranoid. They don’t want to do business with Cuba.”

Suspension by the Cuban Interests Section could potentially affect both U.S. citizens who come to Cuba on people-to-people excursions and Cuban-Americans arriving on charter flights, according to analysts.

U.S. companies still may not offer cruises to Cuba, though several firms have applied to the Treasury Department’s Office of Foreign Assets Control for permission to operate regular ferry service between Florida and Cuba for licensed passengers.

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