Travel Industry Scrambles After New Cuba Restrictions

Travel Industry Scrambles After New Cuba Restrictions
By VICTORIA BURNETT JUNE 16, 2017

As President Trump outlined a stricter policy toward Cuba on Friday,
travel industry representatives scrambled to decode new prohibitions and
reassure clients that the island was not off limits.

Hotel owners, tour operators and online booking agencies — who have been
at the heart of much-expanded contact between the two countries over the
last few years, culminating in early 2016, when President Barack Obama
eased restrictions — took what they saw as confusing signals from the
White House as a sign that the policy would be refined over the coming
weeks.

"It appears to me that they are making this up as they go," said Collin
Laverty, president of Cuba Educational Travel, which has been organizing
trips to that country for several years.

Mr. Laverty said he fielded "endless" calls during the past two days
from travel operators and travelers trying to figure out how they would
be affected by the new policy. On Friday, he wrote in an email to
clients that the organization was "very confident" the policy "will not
impact the fall trips to Cuba."

Under the new regulations, individual Americans travelers will no longer
be able to visit the island on what are known as people-to-people trips,
a popular mode of travel introduced as part of Mr. Obama's historic
thaw. People-to-people trips will now be permitted only for groups and
must be organized by a licensed tour operator.

Americans will also be barred from transactions with companies run by
the Cuban military — a potentially significant restriction, given that
many of Cuba's branded hotels are managed by a military-owned conglomerate.

The Treasury Department went some way to clarify the new rules on
Friday, writing in a statement that the changes would not apply to
people who had already booked trips or to existing business deals with
the military.

But the new restrictions would put new properties like the Gran Hotel
Manzana, managed by Kempinski Hotels but owned by Gaviota, a Cuban
military-run company, off limits to American travelers. Travel
representatives said they would redirect American travelers to hotels
run by civilian tour organizations, including Gran Caribe and Cubanacan
— both of which own several properties in Havana.

Exactly how far those restrictions go, however, is unclear. Could a tour
organizer rent a bus from a military-run company? What about purchases
from a military-run retail store?

Prohibitions of that scope would make organizing group trips to Cuba
"impossible," said Michael Sykes, president of Cuba Cultural Travel.

Tour operators and Cuba experts predicted that the Cuban government
would find loopholes. John Caulfield, who was chief of the United States
diplomatic mission to Havana from 2011 to 2014, said the government
could move tourism assets into the control of civilian ministries.

"In an economy like Cuba's, they can rename things and change things
around," he said.

Still, even if the new rules were workable, travel representatives said,
tighter regulation would put off Americans from traveling to a country
still struggling with its tourism infrastructure.

"We were finally getting to a point where there was a sense of normalcy;
people felt it was legal to come to Cuba," Mr. Laverty said. "Now this
is pushing us back to a point where Americans don't know if it's legal.
That will dissuade a lot of Americans."

Two sectors that were left apparently unscathed by the new policy were
cruises and flights: Fees paid by cruise lines and airlines will be
exempt from restrictions on doing business with the military.

Marriott International, whose subsidiary Starwood runs the Four Points
by Sheraton hotel in the Havana suburb of Miramar, may also have escaped
the crackdown, which the Treasury Department said did not affect
existing business deals.

The Havana Sheraton announced on its website on Friday that it would
require each guest to complete an affidavit at check-in certifying
authorization to travel in Cuba. Marriott said in a statement on
Thursday that it was "still analyzing" the policy directive, and its
"full effect on our current and planned operations in Cuba."

The consensus is that those who will suffer most are smaller-scale
businesses that rely on individual travel — private bed-and-breakfasts,
cafes, restaurants, tour guides and taxis. And fewer individual
travelers would also affect commercial airlines, who last year began
operating dozens of daily flights to Cuba.

Cuba is Airbnb's fastest-growing market, with 22,000 rooms registered to
its booking site and 70,000 arrivals every month on the island,
according to figures published by the company. About 35 percent of
Airbnb's guests in Cuba are American; 12 percent of American travelers
to Cuba stay in an Airbnb-listed property.

The company said in a statement on Friday that it was "reviewing what
this policy could mean for this type of travel" but was pleased that it
would be able to continue to "support Airbnb hosts in Cuba."

But those hosts are likely to see a decline in demand, travel
representatives said.

"Much of the growth has been from people booking from Airbnb and private
casas," said Eddie Lubbers, president of Cuba Travel Network, using the
Spanish term for homes. "It's not just casas — it's restaurants, it's
private tour guides."

He added, "It's going to have an effect."

Source: Travel Industry Scrambles After New Cuba Restrictions - The New
York Times -
https://www.nytimes.com/2017/06/16/travel/cuba-travel-trump-restrictions-industry-reaction.html?_r=0