Don’t fear Cuba tourism

SHAWN CUMBERBATCH, shawncumberbatch@nationnews.com

Added 15 May 2017

jetblue-to-cuba

Passengers of a JetBlue aeroplane, the first commercial scheduled flight between the United States and Cuba in more than 50 years, carry U.S. and Cuban national flags after it landed at the Abel Santamaria International Airport in Santa Clara, Cuba. (Reuters)

 

BARBADOS TOURISM OFFICIALS should not be losing sleep over the expected opening of United States (US)-Cuba tourism.

That’s the implication of new research released by the International Monetary Fund.

While noting that their analysis was “a static one that holds income constant and studies the possible changes in market shares due to normalisation of US-Cuba travel”, the three economists who did the study said any “anxiety” over increased travel by Americans to Cuba “may be misplaced”.

In their working paper, Revisiting The Potential Impact To The Rest Of The Caribbean From Opening US-Cuba Tourism, Dr Sebastian Acevedo, Dr Trevor Alleyne, and Dr Rafael Romeu estimated that “liberalising US-Cuba tourism could result in US arrivals to Cuba of between three [million] and 5.6 million, most of it coming from new tourists to the region”.

However, they added that some Caribbean destinations were more vulnerable to negative impact than others.

“Although it is not possible to pinpoint exactly which destinations will face more challenges from a US change in policy towards Cuba, the analysis . . . does suggest the most likely candidates [are] Anguilla, Belize, Saint Maarten, and the US Virgin Islands as the more vulnerable group,” they said.

“This does not mean that the other destinations are completely safe, or that this particular group will see declining US tourism flows, it only highlights the countries that would need to be more alert to changes in the US-Cuba relationship for possible spillovers.”

They added: “Furthermore, the analysis done here is a static one that holds income constant and studies the possible changes in market shares due to normalisation of US-Cuba travel, but with moderate growth in advanced economies expected to continue, the tourism sector in the Caribbean as a whole is projected to continue growing over the long run.”

The economists said regional concern about the potential opening up of US-Cuba tourism was understandable. But they pointed out that except for The Bahamas tourist arrivals have grown throughout the region over the last 20 years, accommodating rapid expansion in some destinations (Cancun, Cuba, and the Dominican Republic).

“As such, there is no reason to suggest that the sector will not continue to expand in the future. While tourism shares have shifted with Cancun, Cuba, and the Dominican Republic becoming larger players in the region, the rest of destinations have still managed to grow their sectors at respectable rates, even as their market shares have declined.

“Furthermore, Canadian tourists have been the fastest growing market in the region and in particular have become the most important market for Cuba.
And still Canadian tourism has grown in all destinations at a very fast pace despite the fierce competition with Cuba. There is no reason to believe that free travel between the US and Cuba would be very different.”

The research also said “there will be a period of adjustment and more intense competition, which, as in the past, the Caribbean destinations must confront with sensible policies”. (SC)

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