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Cuba Tourism Down as Stricter U.S. Travel Regulations Take Effect

Gas shortages hit Cuba as U.S. tourism to the island falls
Oct 18, 2019 | By Gordon Mott
Cuba Tourism Down as Stricter U.S. Travel Regulations Take Effect
Photo/Angus McRitchie
The terrace of El Cocinero in Havana.

Was it the fact that La Guarida, Havana’s finest privately owned restaurant, was only one-third full? Was it because humidors in Casas del Habano were virtually empty of people and brimming with cigars? Was it the lack of traffic on the usually busy streets of downtown Havana? Was it the power brownouts in the middle of the day? Was it the blocks-long line of big trucks waiting to fill up on diesel fuel? 

Some of those images might have other explanations. September and October are some of the slowest months in Cuba, due to the threat of hurricanes and the lingering tropical summer heat. Traffic has never been a real problem in Havana, like say in Mexico City or Tokyo or Bogotá. Inconsistent electricity has always been an issue. And gasoline and diesel have gone through periodic shortages for years. 

But locals say the truth is obvious. The Trump administration’s shift on U.S. travel regulations and its foreign policy moves in Latin America, especially toward Venezuela, have clamped down on things that Cubans, and the Cuban government, have relied on in recent years for stability, if not prosperity, too. 

Venezuela’s issues can’t be blamed solely on the United States; it is a failed state with plummeting production from its oil fields, one of the primary sources of Cuba’s petroleum products. But efforts to impose a real blockade on Venezuela have put a damper on all its exports, even by ships from third-party countries transporting the oil.

As recently as two weeks ago, the gas shortages in Cuba were so severe that there cars were lined up for three to four days. Four large oil/gasoline tankers arrived in the past week, which has eased the primary gasoline shortages, but there are still sporadic queues for diesel. And many people concerned about the unreliability of gas supplies are simply not driving their cars the way they used to. The lack of refined petroleum products also explains the power brownouts or blackouts in the middle of day because power plants run on petroleum products, and the government is limiting output to guard their stocks.

Behind the primary cause of the economic slowdown, however, is this fact: since last June, the thousands of cruise ship passengers that were arriving weekly are gone. The expected crush of tourists—up to 800,000 were booked between the June 2019 cessation of U.S. cruise lines docking in Havana and other Cuban ports and the end of 2020—has vanished.

Restaurants that used to be overbooked are now begging for customers. Some government-run eateries have closed for “renovations,” while others close early every day, or have limited hours. One local with personal knowledge of the tourism business says hotel occupancy and tourist activities are operating at less than 25 percent of what they were during the last three to four years, when there was no real lull in tourist arrivals during any time of the year. 

While non-cruise ship travel to Cuba by Americans wasn’t affected by the June 2019 announcement, the publicity surrounding the Trump administration’s hostility toward travel to the island nation put a damper on people’s plans to go to Cuba. The Cuban Minister of Tourism announced last week in Toronto that arrivals from the U.S. were down 17 percent since the announcement.

Trying to arrive at a concrete number is a bit difficult. But there have been 15 weeks since the cruise ships stopped arriving; at approximately 10,000 passengers a week, that’s 150,000 fewer visitors. With cancellations of guided tours, and the ongoing slow demand, it is easy to ascertain that arrivals have decreased by at least 200,000 people, maybe more. And now the Cuban government, instead of predicting a total of five million tourists in 2019 (up from 4.75 million in 2018) is now projecting around 4.3 million visitors, which would be a decrease of more than 9 percent.

Let’s be clear. None of my personal observations flow from official comments. My conclusions are mostly based on anecdotal evidence based on a quick, two-day visit and conversations with locals. But it is clear that much of the uptick in economic activity from late-2014 to earlier this year was spurred by previous U.S. government decisions to open up the country with less restrictive travel regulations for American citizens.

Those moves followed, by a couple of years, the Cuban government’s creation of a legal private-enterprise sector, 250 activities or businesses that Cuban citizens were allowed to own for the first time since the Revolution. Yes, they were heavily taxed by the government, but any visitor with any experience in Cuba over the last 50 years could see the effects of capitalism at work—more economic activity, more people with more money (suddenly, private restaurants not only had tourists at the tables but Cubans, too) and a general atmosphere of optimism.

There was more and more investment coming from the U.S., mostly from Cuban-Americans with relatives still inside Cuba, because there were opportunities to create small businesses for their family members. Political change was still behind the economic changes, but there was reason to believe that the political system was going to have to adjust to the new economic realities. After all, the new economics were creating a two-tier economy, an anathema to hardline Cuban government officials, but something they wouldn’t have been able to put back inside the box. The U.S. is doing that for them.

At the very least, the pace of those changes has slowed dramatically. It’s too early to say if the investments of the last three years will be lost, or those new businesses will close because of the decline in tourism. Some off-island tour agencies, also initially hit by the supposedly stricter enforcement of the travel regulations, are now reporting renewed interest in travel during the peak winter months.

One tour owner, Tom Popper of Insight Cuba, confirmed that the initial drop-off reduced his bookings by 20 percent for the remainder of 2019, but that winter bookings have rebounded strongly. That makes sense because in reality, nothing has changed except the rhetoric about the rules. That could mean the worst is behind for the Cuban people. For now, U.S. airlines are saying they still plan on maintaining their schedules to fly back and forth to Cuba. That could change if there isn’t a rebound in U.S. tourists.

There are still worrying rumors, too; that the U.S. government is putting pressure on U.S. airlines to completely cut their service to Cuba as well as pressuring foreign carriers to stop flying there; private citizens, both Americans and non-U.S. citizens who have some ties to the U.S. through travel or other businesses, reporting that they are receiving inquiries from the U.S. Treasury Department.

The government inquiries are asking for detailed explanations of their business dealings with Cuba. Those rumors presage an escalation in efforts to further isolate Cuba. Some journalists have also reported being grilled by U.S. Customs and Border agents upon returning from Cuba about the justification of their activities there, and in at least one case, a journalist was detained for more than three hours.

The apparent reasoning of the U.S. government for putting pressure on Cuba is that the moves will finally force the Cuban government to institute changes in its political and economic systems. However, there doesn’t seem to be any evidence, at least to date, that the U.S efforts will induce those changes, any more than they have during the last 60 years.

The Cuban government, and apparently the majority of the Cuban people, react to the coercion as an attack on the country’s sovereignty, and simply refuse to comply, no matter what the cost. Meanwhile, other foreign governments are stepping into the breach created by the new U.S. regulations, and gaining greater influence with the Cuban government and the Cuban people. The law of unintended consequences is at work, and instead of forcing the Cuban government to its knees, the U.S. is pushing the country back into the orbit of Russia and China and other U.S. adversaries.

Like every previous crackdown by the U.S., or the loss of subsidies to Cuba when the Soviet Union collapsed in the early-1990s, the real victims are the Cuban people. They are, once again, having to deal with shortages and uncertainty in their daily lives. They express frustrations but overall there is a resignation to the reality:  this is just another crisis that they have to find a way to survive.

One Cuban told me that as a result of the gas shortages, which have curtailed bus services, “people are taking two to three hours to get to work … they are just getting up earlier to be there on time.” They are resurrecting all their old wiliness to survive.

It’s just déjà vu all over again.

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