Cuba Prepares

Cuba readies for possible influx of U.S. tourists
Sun Apr 12, 2009 1:10pm EDT

By Jeff Franks

VARADERO, Cuba (Reuters) - Behind the mangroves that skirt the blue waters of Cuba's Bay of Cardenas, a 1,500-slip marina is taking shape as the island's tourism industry braces for what could be its biggest challenge yet.

The Americans are coming -- or they may be, soon.

Rock jetties jut out into the bay and beyond them a plot of land the size of several football fields is taking shape, reclaimed from the water as part of a big new marina project at Varadero, a beach resort 80 miles east of Havana.

"The Americans will come here in their yachts and they'll put them in the marina," said a security guard, gesturing to the earth-moving and sand-dredging behind the mangroves.

"It's so close, they're expecting a lot of them," he added, referring to the United States just 90 miles away.

The United States and Cuba have been separated by a wide ideological gulf since Fidel Castro's 1959 Revolution.

For most of that time, Americans have been prohibited by their own laws from traveling to the communist-led Caribbean island under a 47-year-old U.S. trade embargo.

But that may change. Legislation to free travel by Americans to Cuba is pending in the U.S. Congress, and backers expect it could be approved in what they see as a developing thaw in U.S.-Cuba relations under U.S. President Barack Obama.

"If the travel ban is lifted, you'll probably see hundreds, hundreds of American yachtsmen going to Cuba the next day," said Timothy Ashby, a former U.S. Commerce Department official who studies Cuban commercial issues.

Cuba's government and people have been anticipating this moment for a long time, but questions about their readiness for an onslaught of American visitors are being raised.

The doubts focus on the capacity and quality of Cuba's tourist infrastructure, but also on possible political effects on an island that has resisted U.S. influence for 50 years.

After years of animosity with the United States, Cuban leaders do not like to say that developments such as the Varadero marina, and other big golf and leisure projects, are being built with the American market in mind.

The official line is that Cuba is preparing for visitors from the whole world and if that includes Americans, so be it.

But the United States is the natural market for Cuba, whose economy is reeling from the damage inflicted by three hurricanes last year and the ongoing global financial crisis.

CONTROLLING A TOURISM BOOM

A study for the International Monetary Fund estimated that as many as 3.5 million Americans could visit Cuba annually if the travel ban was lifted.

But travel experts say 500,000 is a more likely maximum the Cuban government would allow in the early years because it does not have enough facilities for more.

"Cuba is ready to absorb another half million visitors a year, but not another million, just because of hotel capacity," said a foreign businessman in Cuba's travel industry.

"I'm sure they will try to control as much as they can in order to avoid a boom that nobody can control. Every country in the world would try to do the same," he added.

One of Cuba's biggest sources of cash in recent years has been foreign tourism, which brought in 2.3 million visitors and $2.5 billion in revenues in 2008.

According to government statistics, the island had about 55,000 hotel rooms in 2007, the last year for which numbers are available. At least 10,000 more are under construction, and others are on the drawing boards.

Experts say Cuba will need more four- and five-star hotels for Americans, but also more and better restaurants, shops, rental cars and other tourist amenities.

Before Fidel Castro took power on January 1, 1959 in a guerrilla uprising, Cuba was a U.S. playground where Americans swilled booze during Prohibition and gambled and partied the night away in Mafia-built casinos and nightclubs in the 1950s.

They came in boats and planes, and ferries carried them back and forth across the Straits of Florida from Key West. They filled up Havana hotels like the Plaza and the Inglaterra and hung out at Sloppy Joe's bar or the Tropicana night club.

"AMERICANIZATION" DEBATE

In 2007, Cuban government figures show just 40,000 people visited from the United States, although the overall figure is said to be far higher because many come to the island through other countries on visits that are illegal under U.S. law.

By comparison, 660,000 came from Canada, the top supplier of tourists to the island, followed by Europe.

Opponents of the Cuba embargo hope more American visitors could open up future opportunities for U.S. investors in a Cuban market now dominated by Europeans and Canadians.

"I think there's going to be a lot more pressure from the likes of Marriott and Hyatt and Starwood and others to allow U.S. investment," said Ashby.

Because of its proximity, travel experts say it is inevitable the United States will one day dominate Cuba tourism again. Within 10 years, said one industry source, perhaps 70 percent of the island's visitors will be American or Canadian.

When that happens, said Nigel Hunt, head of Cubaism Ltd, an Internet travel sales site, Europeans who currently make up about 40 percent of Cuba tourists may go elsewhere.

"If Cuba becomes Americanized, it would probably be less attractive to Europeans ... That's what makes Cuba interesting, modern American culture is not so pervasive here," he said.

The possible "Americanization" of Cuba is a selling point in Washington for lifting the travel ban. Supporters say the more Americans who visit the island, the more pressure there will be for an economic and political opening on the island.

While Cuba's leaders may fret over the prospect of large numbers of Americans arriving, ordinary people in Varadero who depend on tourism for a living seem much less worried.

"Not one person here has anything against the Americans," said hotel cook and taxi driver Jorge Mendives as he puffed on a cigarette outside the stately Mansion Xanadu hotel, built in the 1920's by U.S. millionaire Irenee du Pont de Nemours.

"Let them come to Varadero in their boats or whatever because for us the Americans mean one thing -- more money".

(Additional reporting by Nelson Acosta, Esteban Israel and Rosa Tania Valdes in Havana and Pascal Fletcher in Miami; Editing by Pascal Fletcher)

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