The United States, Cuba and a Prospective Tourism

Industry

By: Ariana R. TobinMarch, 2014

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Manuel Marrero Cruz, Cuba’s Minister of Tourism, walked into work more tired than

usual. He, along with the rest of the Cuban cabinet were at the office late the night before

discussing the United States. Talk about increasing the leniency or even the complete dissolution

of the United States’ embargo had been flying around for some time, but it was getting serious.

More and more, President Barack Obama and President Raul Castro were deliberating what

could happen in terms of diplomacy and relationships between the two neighbors. The same was

true for the ministers of Cuba’s various sectors of government. They were all confronted with the

task of what would happen if and when the United States and Cuba became no longer enemies,

but instead, cordial neighbors.

Minister Marrero Cruz sat and saw the numbers. Almost one hundred thousand U.S.

citizens entered Cuba in 2012 despite the barring policy of the embargo, but if there was open

travel and tourism imagine the increased numbers of travelers not to mention the amount of

money that they could bring to Cuba’s economy. Millions of dollars could go towards the

improvement of infrastructure, medicine, and government. On the other side of this decision is

the integrity of Cuban culture. With the launch of a full scale tourist relationship with the United

States, the small island nation could change. Resorts would be built, tour busses explaining the

rich history of Cuba (and maybe the softening of their Communist history) to people with

cameras. Cruise ships everywhere, and with the proximity to Miami, every day people would

come for just a day to visit, heck they might even just hop a boat for lunch. The worst though are

tacky souvenirs warping the local culture in order to attract a broader group of buyers. So what

factor would outweigh the rest, the long term economic benefits from a tourist relationship, or

keeping the integrity and gusto of traditional Cuban culture and history? As he took a sip of his

coffee, Minister Marrero Cruz realized it was going to be another long day.

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Case Study Question:

The recent relaxation of travel to and from Cuba and the success of these initial visits suggests that the time may be right to ease restriction and expand tourism on both sides. Assuming that the Obama Administration and Congress were to normalize relations, should Cuba restart a wide scale tourism industry with the US?

Description and Background

Cuba, the largest island nation within the Caribbean, is a natural attraction to those who

are looking for a tropical vacation. Despite it being painted as the failing result of Socialism in

the Western Hemisphere by the United States, Cuba offers a variety of travel options, and is

described by Canada’s Cuba Tourist Board as a country that is, “easy, fun and safe to tour

(Explore Cuba, gocuba.ca, 2013).” The Cuban government uses words similar to Canada as it

describes the country as one full of natural beauty and a large cultural heritage, not to mention

the hospitality and warmth of the population towards tourists from various backgrounds.

Tourism is not a new industry for the Cuban people. Following its independence from

Spain, Cuba became a popular travel spot, especially for the neighboring United States. It was

not until the Cuban Revolution’s end in 1959 that the tourism industry in Cuba took a negative

hit. When Fidel Castro overhauled the Cuban government into a Socialist system, he imposed

certain values and morals on the country. The resulting action was to begin to ban visitors and

essentially isolate the island from the world in order to protect it from what he viewed as the

corruption that came with the United States and its Western values (Wilkinson, 2008). Slowly

but surely the Cuban government has seen the potential that a renewed tourism industry holds for

the economic growth and development of the country. Looking to countries worldwide, the

tourism industry within Cuba has expanded to welcome hundreds of thousands of tourists every

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year. Through the results and benefits Cuba has seen through its tourism industry, it has begun to

increase investments towards the tourism industry.

Figure 1:

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

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4

6

8

10

12

14

16

0

0.2

0.4

0.6

0.8

1

1.2

Capital Investment in Tourism, % share of Economic In-vestment

(1993-2013)% share US$ bn

Source: Travel & Tourism Economic Impact Data Search, World Travel and Tourism Council (2014). Travel and Tourism Total Contribution and Percent Contribution to GDP, http://www.wttc.org/research.

In 1993, shortly after the collapse of its main investor and supporter, the Soviet Union,

Cuba was reduced to a struggling country. The collapse of the Soviet Union meant that the

majority of all aid was suddenly cut off. As a result GDP dropped 35 percent between 1989,

when Cuba was at its economic peak, and 1993 (Mesa-Lago & Vidal-Alejandro, 2010). With the

task of rebuilding an entire country less necessary industries such as tourism were left with less

resources for investment. Cuba only invested 1.6% of all capital ($ .04 billion) towards tourism

in 1993. Looking at the data in figure 1, it is evident that Cuba’s economy struggled to

substantially grow through the 1990s and early 2000s. The increase in space between points

corresponding for the year highlights that in 2002 Cuba invested $278 million dollars into the

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tourism industry. While this amount is certainly an increase over previous years, this accounted

for nine percent of the entire investment budget. To compare, the same amount was invested into

the tourism industry during the previous year (2001), but it only accounted for eight percent of

the budget. The difference in percentages means that in 2002 there was less available for the

government to invest overall, as the same amount accounted for a higher share of the total.

The continued investment into the tourism industry continued to increase, and would also

prove to be a strong asset to Cuba’s growing economy. Like many countries worldwide, Cuba’s

GDP has steadily been growing each year. Despite a growing economy and tourism industry, the

global financial crisis in 2008 took a toll on the majority of the world economy and Cuba was not

an exception. Two factors largely impacted the effect of the global crisis (Mesa-Lago & Vidal-

Alejandro, 2010). Trade fell over 34 percent which ended as the worst drop of the decade. This

not only caused increased prices for imports such as oil and food, which are necessary to the

Cuban economy, but also the collapse of the nickel market. Nickel is Cuba’s main export

resource, and the collapse of this market meant a huge cost in profits. These results were not the

only severe cut to Cuba’s economy, but the effects on Cuba’s trade partners, Canada and

Venezuela caused a sharp hit to the rate of growth as trade and business between the countries

suffered (Perez, 2009).

The tourism market surprisingly was not as affected as the rest of Cuba’s industries

during the economic crisis. The Cuban government reported that in 2008 visitor numbers

actually rose by almost 10 percent, much better than other Caribbean countries which suffered

from negative numbers of visitors. While the tourism market did not collapse like that of Cuba’s

nickel market, the growth rates still declined and the Ministry of Tourism continuously reported

fewer numbers of tourists travelling to the island through 2009 and 2010 (Perez, 2009). The

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surviving tourism market kept the economy from a complete collapse as the recession began to

pass and the economy slowly recovered. Overall, Latin America was one of the first regions to

recover from the 2008 global crisis. Quick policy action and a strong hold on macroeconomic

policies allowed for this region, including Cuba, to pull itself out quicker than the rest of the

world. Rather than a strong hit on the economy, which struggled more before the crisis, social

sector programs including housing and access to resources bared the majority of problems from

the recession (Mesa-Lago & Vidal-Alejandro, 2010).

The market recovered with the rest of Cuba’s economy. In 2012, the national GDP

topped out at $121 billion.

Figure 2:

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

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4

6

8

10

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Travel & Tourism Total Contribution to GDP(1993-2013)

US$ bn % share GDP

Source: World Travel and Tourism Council (2014). Travel and Tourism Total Contribution and Percent Contribution to GDP

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Travel and tourism was a beneficial industry, accounting for $8.1 billion in profit or close

to 10 percent of the overall GDP through direct, indirect and induced influences including travel,

accommodations, and foreign investment into the tourism industry (Travel and Tourism

Economic Impact Cuba 2013, 2014). Over the last twenty years, Cuba has invested an

increasing amount of its budget into the tourism industry. Although the high point of

contribution to overall GDP was in 2005 at almost 14 percent, the tourism budget never declined

and kept a consistent contribution to the country’s GDP, even during and after the world

economy crash in 2008 (World Travel and Tourism Council, 2014).

2013 saw the overhaul of the Cuban tourism industry as the country made strides towards

a new marketing strategy to attract tourism from a variety of new markets, including the launch

of Auténtica Cuba, a website exemplifying everything that Cuba has to offer to those who are

considering a trip to the country (Gutiérrez Almeida, OnCuba Magazine, 2013). This was a bold

move by the Cuban government in partnership with Canada to broaden its tourism market to

areas and refurbish its image. Considering the risk, the World Travel and Tourism Council

support this makeover of Cuba’s tourism and believe that this will pay off in an increase in the

amount that tourism will contribute to GDP by at least two percent in the coming years (Travel

and Tourism Economic Impact Cuba 2013, 2014).

While the remarketing campaign of Cuba’s Ministry of Tourism has begun to rebuild the

country’s image, Cuba has not had any shortage of international visitors in its more recent

history. This chart shows the number of visitors entering the Cuban border by region. Also listed

within this data are the top 10 countries whose residents traveled to Cuba during 2008-2012.

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Source: World Tourism

Organization (2013). Yearbook of Tourism Statistics dataset (Electronic). Cuba Factbook UNWTO.

Citizens from Europe and the Americas were the majority travelers to Cuba in all five

years shown in figure 3, however there were a steady stream of people from across the globe. An

interesting point shown here is that the Americas are the only region where the number of

travelers never declines. While the remaining countries and regions experience a dip in visitation

during 2009, the number of travelers from the Americas increases every year. Canada ranks

number one in terms of travelers and this is not a big surprise, as it is also one of Cuba’s top

trade partners for both exports and imports (Travel and Tourism Economic Impact Cuba 2013,

2014).

A noteworthy takeaway from this survey of travelers to Cuba is the United States’

statistics. Nearly 42,000 US citizens ventured to Cuba in 2008, despite a tight restriction on

travel to Cuba resulting from the Embargo dissolving any diplomatic relations between these two

countries. This figure is only the start point. Over the following five years, the numbers would

Figure 3: 2008 2009 2010 2011 2012Totals 2,348,340 2,429,809 2,531,745 2,716,317 2,838,607Africa 7,346 8,691 8,698 8,202 10,975Americas 1,380,232 1,535,853 1,664,053 1,799,074 1,926,601

Caribbean Islands 245,741 315,039 389,766 413,409 399,756Canada 818,248 914,884 945,248 1,002,318 1,071,696

United States 41,904 52,455 63,046 73,566 98,050Argentina 47,405 48,543 58,612 75,968 94,691

East Asia and the Pacific 44,225 40,558 41,349 48,498 53,158Europe 909,086 838,340 809,515 852,065 839,258

Russian Federation 40,621 37,391 56,245 78,472 86,944The United Kingdom 193,932 172,318 174,343 175,822 153,737

Italy 126,042 118,347 112,298 110,432 103,290France 90,731 83,478 80,470 94,370 101,522

Germany 100,964 93,437 93,196 95,124 108,712Spain 121,166 129,224 104,948 101,631 81,354

Middle East 1,981 1,810 2,053 1,841 2,191South Asia 5,156 4,467 5,832 5,841 5,901Other/Not Specified 314 90 255 823 523

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more than double to 98,000 people in 2012. This dramatic increase could be a result to the initial

relaxation of travel restrictions, put into place by US President Obama’s Administration starting

in 2009 (CIA World Factbook, 2013).

As the Cuban Tourism market has expanded, so have the attractions that are bringing

tourists to the island. Not only is Cuba a former Communist country, the new variety of available

attractions are bringing the number of visitors shown in the figure 3. According to the United

Nation World Tourism Organization, most visitors to the island are there for leisurely activities.

Of the 2.8 million tourists that went to Cuba in 2012, 96 percent of the people went there on

vacation.

Figure 4:

96%

3%1%

Visitors by Purpose 2012(In Millions of People)

Holiday, Leisure Other Personal Business/Profess.

Source: World Tourism Organization (2013). Compendium of Tourism Statistics dataset (Electronic). Cuba Factbook UNWTO.

One of the more popular reasons for travelling to Cuba is its Ecotourism sector. Four

percent of the world’s land animal species can be found on the Cuban island, along with nearly

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7,000 plant species over the variety of landscapes. The ecosystems on Cuba are well preserved

and many resorts make it a point to provide a ecotourism aspect to its marketing (Ecotourism,

gocuba.ca, 2014). Other attractions include numerous beaches that provide sailing, diving, or

snorkelling for guests.

Figure5: Medicine Stomatology/Dentistry Nursing License Health Technology Psychology

2008 4,399 555 10,074 9,413 n/a2009 4,488 680 2,663 14,889 1212010 4,149 784 7,315 14,069 2832011 5,463 1,132 6,916 11,663 4172012 10,539 1,654 5,756 10,305 491

The remaining four percent were comprised of other personal travel(3%), and trips for

business/ professional conferences (1%).

Source:La Ministría Salud de Cuba (2013). Anuario Estadístico de Salud (Annual Health Statistics). República de Cuba. Accessed February 8, 2014. http://files.sld.cu/dne/files/2013/04/anuario_2012.pdf

Incorporated into the category of “other personal travel,” is the lucritive industry of

Medical Tourism. Cuba prides itself on having one of the best medical and health programs in

its surrounding areas with numerous graduates in the medical field from a range of specialties.

The Cuban government is extremely confident in its medical programs, and one of its main

exports is medical personnel. For example, Cuba trades medical personnel for resources such as

oil from countries in South America including Venezuela (Feinsilver, 2008).

The strength of Cuba’s medical sector has attracted the attention of people worldwide,

and has translated into an industry of tourism. Medical tourism has made Cuba one of the top

destinations for medical treatment. This is not only due to a medical field that is top rated, but

also one that is extremely affordable. The organization Servimed Cuba has teamed up with

numerous medical locations and resorts to create a reliable and large network of resources for

Cuban Graduates of Higher Medical Education, By Specialty (2008-2012)

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people travelling to Cuba for medical reasons. The program serves not only to pair travelers with

necessary medical personnel, but also allows them to be treated and heal in the comfortable and

hospitable environment of Cuban resorts (Servimed.com Home Page, 2013).

In terms of the tourist market, Cuba seems like an ideal choice for tourists of various ages

and backgrounds. Its tropical location provides pristine conditions for travel almost year round.

Like any country, Cuba’s tourism industry has a slow time, occurring during the Caribbean’s

hurricane season. The dangers of travelling to the island as a result of possible hurricanes and

storms means that visiting is less desirable. This would pose a problem if such an investment was

put into place to build a large tourism relationship with the United States. If Cuba could not bring

in substantial visitors during the off season, it could prove difficult to offset the costs of building

and development for such a large tourism venture. Associated with finances, the ability to find

increased employees for resorts and new jobs created within the travel industry could be a large

hurdle for the country to overcome. Workers tend to avoid the tourism industry as the pay and

benefits are not as attractive as in other industries such as manufacturing or medicine (Becker,

2011). For the government, it would be a very large economic loss in the event that its own

economy and workforce could not support the investments made to develop the tourism industry.

However even those people who choose medicine or marketing instead of a career in tourism

would still need seasonal and/or temporary work. The fear of an unsupported industry is all too

real, however in reality there is a good chance that lack of personnel would not be a problem.

A second obstacle facing the passing of such a decision is the Cuban government itself.

Presently, it is common for government offices to work together on projects. The implementation

of such a large scale investment would necessitate the cooperation of numerous government

offices in both Cuba, and from organizations abroad, including that of the United States. The

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building of large resorts and especially the possibile use of cruise ships between Cuba and other

countries would involve a connection of resources, government contacts, and finances for ports

and other structures (Becker, 2011).

While these problems facing the decision to expand Cuban tourism with the United States

are quite substantial, the gain if successful would be very beneficial to the country. Currently, the

Cuban government is continually investing large amounts of money into its tourism industry,

and seeing the positive results it is looking for in the form of increased visitors and increased

revenues. This result, in combination with the overhaul of Cuba’s market image and tourism

program may provide a large boost of confidence and profits for the Cuban government.

With all the positive results, it seems like an instant choice for Cuba. The inclusion of a

possible collapse from no support and previous concerns about warping culture to cater to tourist

needs makes the scales aim more towards the middle, making this a difficult decision for Cuba’s

government and particularly its Ministry of Tourism. Aspects of a growing industry, and the

opening of a full scale tourism relationship with the United States can bring worries to the

people. Such problems to consider in the final decision would be not only the possibility of not

bringing in enough profits, but also how a considerable increase of focus on the tourism industry

would affect the Cuban people. Assuming that tourist numbers would boom with the launch of a

new relationship, would Cuba’s resources, ecosystems, and population be able to handle the

strain that comes with ample new foottraffic? Also a significant concern is the government and

people’s values. Cuba has a strong history of Socialism, and pride in their government system

and the more conservative moral and political values that come with this structure. In

conjunction with the launch of a full scale reltaionship with the United States, is a softening of

Cuba’s Socialist values in order to appeal to the Capitalist tourism industry and population of the

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United States (Wilkinson, 2008). While in the past this has not been a problem, as Cuba

welcomes numerous visitors from Capitalist countries in Europe and worldwide, the strong

Socialist image of Cuba and its Communist roots might leave a sour taste in the mouths of

American tourists.

The dilemma of choosing to relaunch an unrestrained tourism relationship with the

United States is more than just saying, “yes” or “no.” The considerable effects, both positive and

negative that it could have on the people and economy of not only Cuba, but the United States as

well bring with it the necessity to think critically about how the decision will effect the countries

in both the short and long term. There are a number of decisions about the issue that can be

made, the real hurdle is choosing the answer that will be a long-term solution and beneficial for

Cuba and its relationship with the United States.

Analysis

Through diligent reading and research, scholars and authors alike have shown that

tourism, while a successful industry that can bring about substantial profit also can bring with it

problems involving culture and social programs. In considering the decision of launching a full

scale tourism relationship with the United States, there are a number of issues that should be

considered while debating the options.

Will this new tourism venture be able to provide enough profits to cover the costs

of a growing development sector

Will tourism cause an erosion of Cuban culture in order to cater to the tourist

industry

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Would Cuba’s ecosystem and environment be able to handle the increased traffic

from the increased number of tourists that would visit the island every year

How will a rapidly developing tourist industry effect the morale of the people

o Can the government keep intact the socialist values the government is

built on with increased capitalist influence from new private businesses

and American culture

o Would the tourism industry lead to a reversion of Cuba to the Pre-Castro

era of corruption and crime in order to profit from tourists

These issues cover various facets of Cuba, from the people to the environment. It is no

oddity that tourism can have an eroding effect on an area that is unprepared and not ready for the

increase of people and resources that will be needed to make their tourism industry successful.

The goal here is to balance the pros and cons of such a decision through the use of research

sources as well as expert writings, and discover a solution that is right for Cuba. Bearing in mind

the effects and consequences that could come from an expansion of a full scale tourism

relationship with the U.S., the launch of this industry in the long term will benefit the economy

and people of Cuba through an increased flow of profits and a renewed connection with the

United States.

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Economic Benefits

Looking at the background information, it is no secret that tourism has been a great

influence in strengthening and growing national economies for numerous developing countries,

Cuba included. In terms of the Caribbean region, Cuba’s economy is one that is growing rapidly.

Nickel exports and the service industry serve as a large part of the country’s GDP, but tourism

brings in millions in revenue and has been shown as an industry that supports in times that other

industries have faltered. That said, it is important to note that while tourism is extremely

important, Cuba’s economy is not monopolized by this industry. Today, other industries in Cuba

including agricultural exports and nickel still play a part within the overall economic scope. The

importance of this statistic is that should the tourism industry stall, the economy would not crash,

but would continue on (Wilkinson, 2010).

The equal spread of Cuba’s industries in terms of its economy is significant to mention.

We know that the economy would be alright in the case of an unsuccessful tourism industry, but

on the flip side, a successful tourism industry with the United States, the economy would

increase substantially. Woodrow Wilson Center Latin American Senior Program Associate José

Perales estimates that the opening of full travel privileges between Cuba and the United States

could bring as many as one million visitors from the U.S. in the first year, and increase to

between one and three million every year after that. With this influx of visitors contributing to

Cuba’s economy through travel, stay accommodations and participation of various tourism

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activities, there is little doubt that an expanded tourism industry would not be able to sustain

itself. With such high numbers, the profits made from these programs would be in the high

millions at the least (Perales, 2010).

A unique part of the tourism industry is its ability to assist in the growth of other

industries outside of its own. Tourism revolves around people and consumption. Often times, the

consuming from tourists venture outside of the tourism industry. An example of this is the

purchase of souvenirs and local products such as Cuban rum, agricultural products, and the ever

popular Cuban cigar. Through the sales of these products tourists are not only contributing to the

tourism industry, but also to sales and profits within these other sectors (Wilkinson, 2010). On a

smaller scale, the slow easing on Socialist restrictions has resulted in the opening of small private

businesses. These ventures can gain much profit as the money made does not all go directly to

the government, but to the people themselves. Numerous souvenir shops and local goods have

popped up throughout Havana and other tourist destinations in hopes that travelers will buy

goods and owners will be supported through the consumption of tourists (Babb, 2010).

Tourism would no doubt boost small local economies, however the biggest economic

boost for the tourism industry would come in the form of Foreign Direct Investment (FDI) from

the United States. Cuba is no stranger to FDI, as it receives investments from various countries

through business partnerships. While the government does not release specific numbers of profit

from FDI ventures, numbers show that in 2011 there were over two hundred joint venture

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projects throughout Cuba. With the end of restrictions between Cuba and the United States, the

FDI possibilities would increase dramatically. Even if Cuba allowed additional FDI to account

for only 5% of its GDP, political economist Richard Feinberg estimated that it would have

brought in $2.5 billion in profits between 2000 and 2009. Accounting this with the current Cuban

economy and the boost from an open tourism venture with the United States, it is possible that

the increased FDI from American tourist ventures could transform the business sector and push

Cuba in the direction of an ever more increasing growth level (Feinberg, 2013).

At both the local and national levels, a launch of a tourism industry with the United

States would strongly benefit Cuba. While it is expected that the opening of industry will lead to

the beginning of new developments and expansions, the profits gained from an estimated one to

three million annual visitors from the United States are likely to exceed the costs of growth. The

expansion of tourism will also serve to help improve the profits from other industries through the

consumption of tourists from the United States looking to buy not only souvenirs, but well

known Cuban goods including rum and cigars. These ventures would prove to help both the

government and individuals with Cuba continuing to accept more and more private businesses.

More influential on a more national scale however would be the increase possibilities of FDI and

the stocks and money earned from new partnerships with the United States and their businesses

expanding into high flow tourism areas. All of these possibilities lead to the result of an even

stronger economy, more international ties, and more benefits for the people of Cuba through

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increased assistance from this new successfully growing economy. Without the expansion with

the United States, the economy would grow no doubt, but not at a rate that could substantially

help improve the overall welfare of the Cuban people both inside and outside the tourism

industry.

Environmental Backlash?

The environment is also a factor that comes into play during the consideration of such a

substantial expansion for Cuba’s tourism industry. With the estimated million new travelers to

the country, the ecosystem and environment would be subject to increased stress from more

traffic and the land expansions of large resorts in Cuba’s popular tourist areas. Cuba has

embraced its ecosystem as it is home to numerous plant and animal species that roam the entire

island. This has led to an emphasis in ecotourism, or tourism that is directed at exploring the

natural environment that Cuba has to offer. The dilemma is that the increased development could

threaten the ecotourism industry. As Cuba is an island and only has so much land to work with,

especially that land on the coast that appeals to the tourist industry, the possibility of such a large

expansion could put some aspects of the industry and the environment that is so loved by tourists

in danger.

The expanded development of the tourism industry would lead to the building of new

resorts, but probably more popular would be resources to ensure numerous cruise ships could

dock and sail between Cuba and the United States. Numerous foreign investors have begun

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looking into costs for the development of ports and on shore attractions to entice people to take a

trip to Cuba by boat. With the short ninety mile distance between Florida and Cuba, this industry

could even work by providing short day trips to the island. Currently, many of Cuba’s beaches

remain in pristine condition, and the prospect of expansion could in the future damage these

beaches and landscapes (Carty, 2009).

While it is wise to be wary of the environmental effects that come with increased tourism,

in reality the great jump of tourist numbers is something that Cuba has experienced before, and

in response has handled efficiently. The Cuban tourism industry has been developing for over

twenty years, since 1993. The fall of the Soviet Union inspired the boom, and the Cuban

government has not looked back since then. The number of visitors has increased by the millions

and the development of Cuba’s tourism industry has likewise grown. The Cuban government

however has rightly responded through the implementation of policy and restrictions put into

place to minimize any environmental damage. As a result, Cuba has efficiently kept the lush

environment intact (Wilkinson, 2010). The ecosystem in Cuba, as previously stated is one of its

largest selling points. In turn the steps that have been taken reflect the importance to the Cuban

government and tourism industry. Partnerships between the Cuban government and international

organizations including the United Nations Development Program have begun to take steps in

preventing degradation of the environment through policy and rules that will aid in the

preservation of the environment while still allowing for an enjoyable tourist experience. An

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example is a specialized tourism program that takes tourists diving in Cuba’s Jardines del Rey

archipelago islands. Not only does the program provide this opportunity to dive in some of the

clearest waters in the area, with the sponsorship of the Cuban-Italian Association, the group also

manages the well-being of the archipelagos, ensuring that they are not greatly harmed through

the increasing number of visitors (Carty, 2009).

The Cuban government has also taken steps to ensure that any and all development done

on the island is sustainable. After tourism became a main factor in the Cuban economy, and the

push for a strong expansion during the late 1990s, the fear of erosion led the government to

create a national commission in charge of protecting the landscape in the wake of tourism

development. This group, called the National Commission enforced the Environmental Impact

Law which required all tourism projects to be approved before they were commissioned and

started. The National Commission was incorporated into the Ministry of Science, Technology

and Environment in 1994 and there is continues to scan and ensure that all development projects

take into account the environment and sustainability before they are started. The very presence of

this commission group ensures that the development, even so expansive as that to accommodate

U.S. tourist groups will be done in a way that protects the ecosystem and Cuba’s profitable

ecotourism sector (Wilkinson, 2010).

Aside from the new building of resorts and vacation areas is the step from the Cuban

government to renovate what they already have to provide for increased numbers of tourists.

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Rather than spending millions in the erecting of new developments, the government has begun

instead to renovate many of the old, pre-revolution establishments. Not only beach resorts, but

also inns and attractions within tourist destinations including historic Old Havana and long

deserted clubs along the coastline (Babb, 2010). Not only does this assist in the sustainable

development of resources for an expanding tourist industry, but it also begins to revitalize the

nostalgic landmarks that many tourists travel to Cuba to experience.

The launch of a full scale tourism industry relationship with the United States would in

the end have little impact on the environment as a result of development. The Cuban government

recognizes the environment as an asset to the tourism industry, and in response has taken steps to

protect it. Committees both locally and those with international connections to Cuba are vigilant

in ensuring that development is done in a sustainable way, and that both flora and fauna are

protected. This is seen in special government sponsored programs, and through the beginning

restoration of old landmarks. By not relying solely on new structures and development, Cuba is

taking the easiest step to being sustainable and recycling the resources they currently have. Yes,

Cuba will have to endure increased foot traffic, but the steps that are being taken to be

sustainable are helping reduce the long term effects that result from more people travelling to the

island. Cuba’s tourism industry has been expanding and developing for decades now, and the

opening of the island to the American people is similar to the first expansion of tourism during

the early 1990s. Cuba was prepared for and efficiently handled numerous tourists during the

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1990s and 2000s, and this would just be the next step in development that Cuba has been

preparing for.

Social Influences

Environmental and economic issues have proven to be essential in making a decision for

expanding tourism to the United States. However, perhaps most influential in the decision is the

impact on Cuba’s people and the social systems within the country. While the economy will

boom and steps are being taken to ensure the environment will be preserved, a close relationship

with the United States will expose the Cuban population to Western traditions and values such as

civil society and a much more sensationalized population. Cuba’s historically strong Communist

and Socialist systems have led to a less flamboyant culture, and there is fear that allowing full

travel from and exposure to the people of the U.S. will dilute the Cuban culture and perhaps even

begin to destroy the pride of the Cuban government. This is a valid argument against the launch

of a tourism industry with the United States as the effects could indeed be detrimental to the

stability of the government. However, research shows that the Cuban people are more invested

into the Socialist system than ever through strong involvement at political polls (Wilkinson,

2010). The people’s heritage is something in which they take great pride. In fact, it is even

shown that the expansion of the tourism industry actually is only possible because of Cuba’s

government.

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The most consistent fear putting pressure on the decision is the worry that after opening

tourism to the United States, Cuba will revert back to the conditions present during the Pre-

Revolutionary era. Before Castro’s revolution and the placement of a strict Communist

government, Cuba was the ideal travel locale for American tourists. Nightclubs, parties and

casinos were popular and the goal for a getaway from the grind of every day American life

(Ward & Devereux, 2007). However with this came the corruption and crime. Many Cuban

tourist spots were controlled by local gangsters, and prostitution became a common and easy

way for women to make money in the glamour of Havana’s tourist district. All of the corruption

and crime was blamed on the influence of American tourists travelling to the island, most of

whom exploited the less than honorable ventures often during trips (Khrushchev et al., 2007).

Today the overall climate of the tourism industry is different. No longer controlled by

gangsters and organized crime, the tourism industry is much less corrupt. As most of the

companies and resorts are owned by the government itself, they take pride in making sure Cuba

is a safe and crime free destination for tourists (Wilkinson, 2010). While the nightclubs, most

notably the Tropicana Nightclub that has been in business since 1938 still stand and operate, now

they are less lucrative and instead stand as a nostalgic symbol of a glamorous, past era. This

actually may work to the benefit of the Cuban government. Travel writers alike have shown that

many of the people travelling to Cuba on vacation choose the destination because of the mix of a

Socialist presence and the memories of the Pre-Revolutionary era. Because Cuba was isolated

23

from tourism for so many years during the beginning of Fidel Castro’s leadership, tourists are

that much more inclined to discover the landmarks of this old ideology (Babb, 2010). This desire

for nostalgia, mixed with the Cuban government’s determination to keep a safe environment

translates into the best of both worlds, a pre-revolutionary nostalgia coupled with a safer

experience through the restrictions provided by the government.

Likewise, the dilution of Cuban culture as a result of increased Western influences is also

a fear that has little evidence to it. While people trying to sell souvenirs to the tourists may begin

to exaggerate their culture to appeal to the excited tourist, Cuban Ethnologist Fernando Ortiz

says that it is virtually impossible to dilute and corrupt the Cuban culture. Ortiz argues that the

people’s culture within Cuba is strong, and even now is made up of a mixture of cultures. The

addition of influences from outside cultures will not take away from the essence of Cuban

culture, but instead will just add another layer. Cuba’s culture is compared to an ajiaco, which is

a gravy made of anything you can add that is available. Like this, the originality won’t be lost

with the addition of American tourist culture, but will assist the Cuban people to evolve to

another level (Ortiz, 1995). In addition, Cuban culture is for the most part already well known in

the United States. The strong Cuban-American population in Florida as well as throughout the

U.S. has exposed traditions and cultural specialties that are found within Cuba (Wilkinson,

2010). Expanding Cuban tourism would not take away from Cuban culture, because the unique

24

culture that is present is what the American people are travelling to experience. Trying to water it

down at all would be a bad move on the part of both the Cuban people and American tourists.

The largest issue perhaps facing the decision above all other social effects, is the

influence increased consumerism and Capitalist ventures will have on the integrity of Cuba’s

Socialist government. Fidel Castro outlawed tourism for many years because he saw the

corruption that it brought, and he wanted nothing to do with it. Only when it became necessary to

sustain the country did he open its doors to the outside. Frankly, there is again no evidence to

support the erosion of commitment that people have to the Socialist core, despite the

restructuring to include more capitalist venture and private ownership. The Cuban population’s

support in the form of electoral participation is as strong as it ever was at an astounding 96%

(Wilkinson, 2010). Often times such high numbers can be associated with coercion by the

government, but participation in Socialist programs has increased as well and involvement in the

Communist Party has increased in numbers. In fact, an interesting find suggests that the presence

of Cuba’s Communist government is what has allowed the rapid expansion of the tourism

industry to become so successful. Its intervention in through restrictions in policies at the higher,

macroeconomic level has helped keep the negative effects to a minimum (Wilkinson, 2010).

While Cuba may seem much like a Communist Utopia, not all of Cuba’s people are satisfied.

Castro’s government has resulted in numerous human rights violations and oppression of

minority groups within Cuba. Groups known as the Cuban dissidents are in favor of a new

25

government that is more democratic and that would give more freedom to the people. Protests

and demonstrations against the government are a reality and the presence of a strong American

population due to a tourist industry could encourage the dissident movement in addition to the

growth and development of a civil society (Casey, 2010). When it comes to the tourism industry,

and because of the stronghold that is visible in rules and regulations, it is doubtful that the

government would see the tourism industry evolve in a way that would threaten either Cuba’s

Communist roots or its unique culture. While the government has begun to allow private

ventures to citizens, in the near future there is little evidence that is supporting a full overthrow

of the current system in favor of a more Democratic government.

Recommendations

It is in Cuba’s best interest to launch this full-scale tourism venture with the United

States. The recent overhaul of Cuba’s tourism industry through the launch of Auténtica Cuba

through the Canadian government, and the investments that have already been put into play show

that there is already commitment to further developing the industry. Expanding this idea to

include the United States is the natural next step. Not only will the launch of this bring in billions

of dollars in revenue, it will renew connections between Cuba and the United States. Hesitations

that the Minister of Tourism has are valid, but below the surface there is a strong majority of

positive consequences.

26

As previously mentioned, Cuba’s economy is very much developed because of its

tourism industry, however it is not wholly dependent on it because of diversified industries and

the strong structure of the government. In contrast, The Bahamas, another Caribbean tourist spot

is not so lucky. The tourism relationship with the United States is very influential to the well-

being of the country as the majority of visitors to the islands are American citizens. As a result,

the economy is very dependent on American visitors and when they do not receive enough

tourists, their own economy suffers greatly (Bahamas, State.gov, 2013). Cuba, on the other hand

would not have this problem because of their economic structure. Essentially, the full launch of

the tourism industry with the U.S. can only bring benefits to Cuba. They are well experienced in

tourism as they welcome millions of visitors from all over the world, and do not depend only on

these people visiting.

As an alternative, Cuba could also open the doors to the American people in terms of

tourism, but instead not have a full scale relationship with them. This is also a noble route to

take, however perhaps less desirable in terms of efficiency and profitability. In this scenario,

Cuba would welcome the increased number of tourists from the United States, but choose not to

make concessions to prepare for the increased traffic to the island. There would be no

connections to American travel companies and no special amenities or information with

American travelers. In essence, Cuba would continue what it was doing in terms of development

and not make any concessions for the influx of U.S. citizens. This route would be the easiest to

27

implement as it does not involve making many changes to the development that is currently

being implemented. The issues that arise from this however are that the rate of development

would possibly not be able to keep up with the influx of visitors. Another effect of this

alternative would be that the government would not be able to control the industry with millions

of travelers coming in from the United States. Right now the market is successful in part because

of the government’s regulations on the tourism industry. In not making connections and

preparation for a rapid increase of American travelers, the government would have to

accommodate the millions of visitors without an effectively developed area. There is the

possibility of limited hotel rooms, overbooking and just an overall atmosphere of chaos.

A second alternative to launching a full scale industry is to limit the number of visitors

from the U.S. through the use of a visa system. Like the United States, the Cuban government

could choose to only issue so many tourist visas every year and again not change anything in

terms of development and overhaul of their current tourism industry. In regards to ease of

implication, this avenue would also be relatively easy to implement into the tourism industry.

Not only would this route allow visitors from the United States to come and enjoy the tourism

industry within Cuba, it would also allow development to continue at its current pace and

preserve the sustainability of the current projects. Ideally, this alternative to a full launch seems

the most desirable. It would not put any extra pressure on the Cuban government, and it would

still allow profits to come in from American tourists and tourism companies. The negative of this

28

however is that it does not allow Cuba’s tourism industry and relationship with the United States

to develop to its full potential. While the full scale launch of a tourism industry may begin with

some chaos and disorganization, this halfway point could cost the Cuban government millions in

tourism profits and investment opportunities. This alternative is the safest way to begin the

relationship, but may be more difficult to sustain in the future with its limitations.

Overall, the full scale option in the long term would be the most beneficial choice for the

Cuban government. Not allowing a relationship to develop with a country so close like the

United States could prove to be more of a hassle for Cuba than the industry itself. Without

creating the networking and connections between the United States and itself, Cuba could subject

itself to being underdeveloped and not ready to handle millions of new tourists. The influence

and assistance that the tourism industry would gain from becoming increasingly connected with

the U.S. tourism industry would prove to be beneficial and would allow American tourists to

enjoy Cuba without degrading the landscape, history, and people. Economically, it would cost

the most to develop even more to be ready for American tourists, but by being exposed to its full

potential, the industry could also stand to receive billions of dollars in profits. The halfway point

option would be a good alternative to start with, or to do a test run of a more developed Cuban

tourism industry, but again would be hard to match in terms of economic benefits and

relationship building with the United States with the full scale approach.

29

Conclusion

Cuba and the United States have endured a sour relationship for decades now, and in the

case of a normalization of relations between the two neighbors, it would greatly benefit the

relationship for Cuba to launch a full-scale tourism industry with the U.S. Fueled mostly by

economics, this venture would prove to boost Cuba into a whole new level of development and

could increase GDP by billions. The negative consequences and fears of a dissolving Cuban

culture and dedication to its Communist history is an ever present factor in this dilemma,

however current research shows that the Cuban people are more invested than ever in their

cultural and historical heritage. Frankly though, if Cuba chose not to create a relationship with

the United States in the wake of a free travel policy between itself and the United States, there is

the possibility that the number of American tourists could flood the island and there would be

chaos. This launch could lead to the foundation of a relationship, and would support the country

in the wake of millions of new visitors.

If Cuba’s Ministry of Tourism is hesitant to go all in on a new tourism industry, a test run

or limited number of visas available for American tourists is a safe and logical alternative. This

route would not allow the country to still create ties to the U.S. tourism industry, but would

create a test run for Cuba that could assess if they really wanted to go for the full-scale tourism

approach. Cuba’s strong government, history and pride in itself makes it an ideal and controlled

30

tourism spot for the U.S. Through a full-scale tourism industry, American visitors can submerge

themselves into this culture, but still be home in time for dinner back in Miami if they so choose.

31

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