Cuba; the next Travel Hot Spot

Wednesday, February 20, 2008

TRAVEL ADVANCE (R)
Volume XVIII, Number 35
Wednesday, February 20, 2008

U.S. PONDERS IMPACT AS CASTRO QUITS. Fidel Castro, bedridden for 19 months, on Tuesday gave up the almost unlimited power he has wielded in Cuba for nearly 50 years, but whether the surprise announcement represented a historic change or a symbolic political maneuver remained unclear. It is expected that his brother Raul, 76, will be officially named president, and some experts consider him to be more pragmatic. With the 81-year-old Castro stepping aside, scores of businesses see new opportunity to push for an expansion of U.S.-Cuba trade.

However, U.S. officials said Tuesday that there were no immediate plans for further easing of the 46-year-old trade embargo. Still, experts say the real shift that American businesses are waiting for will come out of Washington, not Havana, with the U.S. elections in November. The departure of Castro, combined with new leadership in the White House could lead to small changes such as liberalizing U.S. travel restrictions to Cuba. (Pages A1, New York Times; A1, Wall Street Journal; 1A, Miami Herald; www.LosAngelesTimes.com)

*Hotel chains and cruise lines have long eyed Cuba as a lucrative destination, though U.S. tourists are forbidden by the U.S. government from vacationing there. Tuesday's news that Fidel Castro is stepping down "allows U.S. companies to dust off the Cuba file," says Caribbean travel analyst Scott D. Berman of PricewaterhouseCoopers. "But I don't think it's going to have immediate impact." A resort building boom by European chains has resulted in 70,000 hotel rooms, Berman says. The island drew 2.1 million visitors last year, says Christopher P. Baker, author of five books about Cuba. Most were Europeans and Canadians. (Pages 5A, USA Today; 20A, Miami Herald)

*Cuba could represent a significant opportunity for U.S. cruise lines, now that Castro has resigned, reports Robin Farley, a leisure analyst with UBS. "New leadership could be a positive event for the cruise industry if diplomatic relations resulted in the opening of Cuba to American tourism," Farley wrote in a research note. Farley said Cuba would represent a new itinerary with significant pent-up demand from American tourists and a lack of hotel infrastructure, favoring cruise ships as a way to visit the island. "Cuba is the largest island in the Caribbean and only 230 miles from Miami, allowing it to be part of a variety of itineraries and has long been in the cross-hairs of the American cruise lines," Farley wrote. "Havana is a natural deep-water port and we believe operators could build dockside infrastructure on a much faster timeline than it would take to build a U.S.-branded hotel product. Itineraries could be sold with just several months advance notice. (www.ModernAgent.com)