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Infrastructure Limitations Threaten Cuba’s Tourist Potential

6 Apr, 2016

By: Tracey Schelmetic
Sold-Out Hotels, Prince Increases Make Area Less Than Inviting for U.S. Visitors

While Cuba may be the hottest, hippest destination around, it’s not making things easy for tourists.

The U.S. has established a new relationship with the country, culminating in the first state visit to Havana by a U.S. president since 1928, and the U.S. travel and tourism industry is realizing its appeal. Recently, President Obama announced that he believes Congress will finally lift the trade embargo with Cuba in the near future, which will (in theory) open up a number of opportunities for beach resorts, hotels, restaurants and resorts and sports tourism.

Americans may soon be able to visit Cuba without being part of an authorized and licensed tour group, and will be free to spend their American dollars on Cuban soil. (Some restrictions remain, though the travel industry has deemed them “largely unenforceable.”)

However, some travel experts have noted that Cuba’s infrastructure, which is decades outdated, is simply not strong enough to support large tourism initiatives, and travel to the island nation will continue to be limited to special interest groups. Even increases in travel to Cuba made possible by an ease in restrictions are straining Cuba’s limited tourist resources to the seams. Despite the fact that new hotels and resorts are being built, it may be years before the area can realize its full tourism potential. And unfortunately, early tourists will experience the disappointments.

“Cuba is facing tremendous challenges,” Ronen Paldi, the president of Ya’lla Tours USA, which has been operating in Cuba since 2002, recently told Travel Weekly. “In the last 15 to 16 months, the administration is doing all this easing of the restrictions. But what has not changed is the infrastructure in Cuba. Hotels are full, completely sold out until May 2018. Prices are going up, space is becoming more and more limited.”

Financial restraints also exist. U.S. issued credit cards are still not accepted in Cuba, and most Americans are unaccustomed to traveling on cash. American banks have still not enabled ATM withdrawals in Cuba. As far as the U.S. government and affiliated organizations are concerned, trade embargoes must still be observed.

“The problem is that, so far, relatively few U.S. banks have been willing to go through the process of making arrangements with the Cuban government and with Cuban merchants to actually accept U.S. credit cards,” William LeoGrande, a professor at American University, told Travel Weekly. “The profit margin is small, and they are afraid of large fines from the Department of the Treasury if they inadvertently violate the embargo.”

Sports tourism will continue to be tempting fruit. Baseball is wildly popular in Cuba, and there are those inside baseball who believe that President Obama's historic trip to Cuba is an important step in opening the Cuban market to U.S. sports exports, including baseball.

"Minor League baseball is going to play a big role," Walter Leger, an investor in the New Orleans Zephyrs, recently told CBS affiliate WWLTV. "In fact, we're working right now on bringing the Cuban National team to New Orleans to play a game against the New Orleans Zephyrs, possibly this season."

Bringing Cuban athletes to the U.S. is one thing. Bringing Americans to Cuba for sports purposes is another. Some human rights critics believe that Cuba should be induced to clean house on human rights before the channels of trade are opened. In a joint news conference with Cuban President Raul Castro, President Obama praised the Cuban leader for openly discussing the two countries’ differences, but said a "full flowering" of the relationship can happen only with progress on the issue of rights.

In the meantime, the increase in travel to Cuba facilitated by easing of the embargo has actually made it more expensive, instead of less, to travel to the country.

“We’ve seen costs increase by 40 percent and 20 percent, respectively, over the past year,” Tom Popper, president of Insight Cuba, told Travel Weekly. “If demand increases, it’s more likely we will see prices increase even more.”

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