Monday, July 5, 2010

Bahaman Perspective on Cuba Opening

Bahamas Should Brace For Travel Ban Lift


The Bahamas, and other Caribbean countries that depend heavily on tourism, should begin to prepare for the possibility of the decades-long ban on United States citizens travelling to Cuba being lifted, according to economists in the region.

With The Bahamas being said to have the highest level of dependence on U.S. tourists in the Caribbean, it is considered the most vulnerable to the effects of the ban being lifted.

The latest statistics show that 80.5 per cent of the country’s stopover visitors in 2008 came from the United States.

Before the trade and travel embargo was imposed in 1962 after the Cuban Missile Crisis, Cuba had been the "playground for" U.S. tourists and the largest recipient of American visitors to the region.

After the embargo, tourism in the neighbouring Caribbean countries, like The Bahamas, surged.

Noted Jamaican economist and former Chairman of the Jamaica Tourist Board Dennis Morrison recently published an article in a Jamaica daily warning Caribbean countries to take the possibility of a lift very seriously.

He said various studies suggest that Cuba’s tourist arrivals would surge to full capacity at the expense of other Caribbean destinations.

"The low travel costs from the U.S. is seen as one of the major factors that would spur the shift in visitor traffic, but the effect of short-run supply constraints in Cuba’s tourist industry is less clear," said Mr. Morrison.

Minister of Tourism Vincent Vanderpool-Wallace has said on numerous occasions that the country’s proximity advantage to the U.S. is canceled out by the cost to fly here.

In the case of the Family Islands, he noted that it is time consuming to fly here from several states when compared to destinations which are much further away.

The economist made mention of the International Monetary Fund (IMF) Working Paper published in July 2008 "Vacation Over: Implications for the Caribbean of Opening US-Cuba Tourism," which suggests it is likely that pressure on Cuba’s capacity would lead to a shift in tourist traffic from European and other developed countries to neighbouring Caribbean countries.

The paper also pointed to the possibility, depending on the timing or pace of Cuba-U.S. tourism liberalisation, that Cuba could seek to hold on to non-U.S. visitors even while preparing to attract increased U.S. arrivals.

"Neighbouring tourist destinations, especially the ones that are heavily dependent on the U.S. [like The Bahamas] would lose the most if they are not prepared for the change. Because of the scope for increased U.S. tourists to Cuba and the possibility that non-U.S. tourists would be redirected to neighbouring countries, the study anticipates that total Caribbean arrivals could increase by up to 11 per cent," Mr. Morrison said.

A committee of the United States House of Representatives voted last Wednesday to reverse the restrictions on Cuba.

Economists and political pundits throughout the region believe the vote by the Agriculture Committee on a bill which covered restrictions on travel and the sale of American commodities to Cuba could be the first step towards Congressional approval to lift the longest trade embargo in recent history.

"Though there has been talk of such a move for some time, the strong, pro-embargo, Cuban-American lobby has managed to stall efforts in the U.S. Congress to ease travel restrictions and was supported by the threat of a presidential veto under President George W. Bush," Mr. Morrison said in the article.

"Relying on the stalemate to keep competition from Cuba at bay, Caribbean policymakers and the industry in the region have yet to lay out a plan of action to manage the consequences of a post-embargo era, giving lip service instead, while carrying on business as usual."

The proposed Travel Restriction Reform and Export Enhancement Act, which must still pass the Foreign Affairs and Financial Services Committees before being voted on by the full House of Representatives and then by the Senate, is being pushed as part of the drive to boost U.S. exports.

Several powerful business and farming groups, including the U.S. Chamber of Commerce, are throwing their support behind the bill.

It has also attracted some Republican support.

The interest in the bill comes after the Obama administration lifted travel restrictions last year, on Cuban-Americans with family members in Cuba.


My comment:


It is up to the chairs of the House Foreign Affairs and Financial Services Committees whether their committees act on the Cuba trade and travel bill. Both chairmen, Representatives Howard Berman and Barney Frank, support the legislation and could allow the bill to go directly to the House floor after the current July 4th recess.

The whole House could vote in July and the Senate as early as September, or after the mid-term US elections in November.

Limits on Cuban tourism infrastructure capacity could make joint destination travel an attractive option for Bahamas resorts and transiting airlines.

More here

John McAuliff
Travel Industry Network on Cuba
Fund for Reconciliation and Development

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