If Trump reverses the U.S. Cuba policy, airlines and cruise lines could lose $3.5 billion

If Trump reverses the U.S. Cuba policy, airlines and cruise lines could
lose $3.5 billion
BY CHABELI HERRERA
cherrera@miamiherald.com

Cruise lines and airlines stand to lose $3.5 billion and more than
10,000 jobs over the course of President Donald Trump's four-year term
if the administration fully rolls back all of the United States' Cuba
regulations, according to a report by nonprofit Engage Cuba.

Trump is expected to change some of the relaxed regulations that former
President Barack Obama put in place in December 2014, but the full scope
of his Cuba plan is yet to be seen.

The report commissioned by the Washington, D.C.-based nonprofit, which
advocates for more open relations with the island nation, assumes a
worst-case scenario in which Trump does away with legalized travel to
Cuba, expanded remittances, general licenses for certain exports and
research collaboration and even reinstates the "wet foot, dry foot"
immigration policy — something that the White House has not directly
indicated it plans to do.

Taking a gander at what a full reversal scenario may look like for the
businesses that have moved full steam ahead into the Cuban market,
Engage Cuba predicts that the travel sector will take a substantial hit
and, by extension, Miami too.

If the Trump administration were to reverse all of Obama's Cuba
policies, $6.6. billion and nearly 12,300 jobs would be lost over four
years, according to the Engage Cuba report. More than 50 percent of the
revenue losses and more than 80 percent of the job cuts would be in the
cruise and airline business. A large portion of that business originates
at PortMiami and Miami International Airport.

"For instance, the industries closely linked to air travel ... have
invariably seen a greater demand for labor at airports with high Cuba
traffic volume, such as Miami, Tampa and Fort Lauderdale," the report says.

Seven U.S. airlines fly to the country and nine American cruise lines
have scheduled service to Cuba since tourism rules were relaxed to
include 12 categories of authorized travel, including the popular
"people to people" option that most Americans use. Airlines initially
overshot demand for travel to Cuba, but have since adjusted their
flights as the popularity of visiting the country remains high.

The airline industry stands to lose $512 million annually based on
average ticket sales, according to Engage Cuba, and 3,990 jobs. The
cruise industry would lose $392.2 million annually assuming all cruises
sold out, and cost cruise lines 6,164 jobs, most in Florida.

But the report concedes many of its estimates are based on limited data.
The number used for cruise revenue, for instance, is partially based on
a survey on passenger expenditures conducted at Fort Lauderdale's Port
Everglades. Many of its estimates, the report said, were "calculated
using demand projections from secondary sources, imperfect primary data
collection, and price averages, all of which contribute to a degree of
uncertainty."

Still, "this study represents our best guess given available data," the
report says.

Beyond travel, Engage Cuba predicts changes to current rules could
diminish U.S. exports by $227.6 million per year, costing 1,359 jobs.
Remittances to Cuba could be cut by $320 million annually, ending 782
jobs at money transfer companies.

If the Trump administration were to reinstate the "wet foot, dry foot"
policy, which allowed Cubans who set foot in the U.S. to stay in the
country, taxpayers would be saddled with the $238 million annual burden
that previously helped provide benefits to Cuban migrants, according to
estimates by the Congressional Budget Office.

It is still unclear how many, if any, of the report's findings will come
to fruition, all of which are dependent on the scope and degree of the
administration's changes. Trump is expected to announce his Cuba policy
in the coming weeks.

Chabeli Herrera: 305-376-3730, @ChabeliH

Source: If Trump reverses the U.S. Cuba policy, airlines and cruise
lines could lose $3.5 billion | Miami Herald -
http://www.miamiherald.com/news/business/tourism-cruises/article154075594.html