Saturday, February 18, 2017

Remember the one about how everybody wants to go to Cuba?



For a while, we’ve been hearing all of this anecdotal evidence about Americans desperately making plans to visit Cuba. Haven’t you heard your co-worker or neighbor say that he wants to see Cuba?  
Well, it turns out that Cuba is not getting all of those U.S. tourists after all. It is not really that surprising.  
Let’s check this report from by Justin Bachman:
America, did you miss the travel industry’s memo declaring Cuba the hottest new destination?
Apparently. Service to the long-time U.S. foe began in September, but after just five months the largest carrier to the island, American Airlines Group Inc., cut daily flights by 25 percent and switched to smaller jets on some routes. 
Meanwhile, Silver Airways Corp. reduced weekly flights to six Cuban cities and JetBlue Airways Corp. downsized its planes so as to match lower-than-expected demand.
“It’s going to take a really, really long time for [Cuba] to become a Caribbean destination that’s as popular as some of the other ones,” Andrew Levy, the chief financial officer for United Continental Holdings Inc., told Bloomberg News in November.
While the rest of the Caribbean is hopping with the U.S. winter break crowd, Cuba has some unique problems. 
The big one is that airlines, with no real idea about demand, were overly ambitious when they jousted for the limited routes allowed by U.S. regulators. 
With a mandate for only 110 daily U.S. flights — 20 into Havana, the most popular destination — the carriers tumbled over each other last year to get a piece of the pie, leaving the island oversubscribed.
The air rush into Cuba “wasn’t based on demand but speculation. They had no history to look at,” said Karen Esposito, general manager of Cuba Travel Network, which specializes in tours to the island. Now they do.
Silver Airways described additional obstacles, pointing to the complications accompanying U.S. travel arrangements to Cuba, along with too much capacity from larger carriers. 
Still, spokeswoman Misty Pinson said, the Fort Lauderdale, Fla.-based airline “is optimistic about the future growth potential in Cuba.”
Not a shock, frankly. Cuba is not ready to handle U.S. tourists who are accustomed to better facilities in Cancun or Jamaica or the Dominican Republic. After all, who wants to go on vacation to an island with 1959 infrastructure? Cuba’s communist system spent a lot of money on the military, prisons and telling gullible U.S. college professors about their health care programs. Unfortunately, they did little to improve such basics as water pipelines, the electricity grid or having hotels with clean sheets.
There is another reason. Cuba is competing with countries that have been marketing to U.S. tourists for decades.
It all reminds me of a conversation I had with an older couple years ago. They went to Varadero, Cuba for their honeymoon. The lady said that Cuba was a popular honeymoon destination back in the 1950s. Back then, the hotels were private and well run, the restaurants were first class and hygiene was not a problem.     
Cuba today is not that way. It won’t be that way for a long time. So don’t expect a lot of Americans to go to Cuba.
P.S. You can listen to my show (Canto Talk) and follow me on Twitter.
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