Tue | Aug 22, 2017

New Trump rules on Cuba travel leaves winners and losers

Published:Wednesday | June 28, 2017 | 6:00 AM
US President Donald Trump
In this August 6, 2015 photo, cyclists ride past the US yacht 'Still Water', moored at Hemingway Marina in Havana, Cuba.
1
2

United States President Donald Trump's new policy on Cuba travel has winners and losers: Group tour operators hope to sell more trips, but bed and breakfast owners in Cuba say they're losing business.

Five of 12 private bed and breakfast owners in Havana and Cuba's southern colonial city of Trinidad told The Associated Press that they received cancellations after Trump's June 16 announcement .

"It's contradictory that (Trump) says he want to help civil society, the Cuban people, but what he's doing is hurting them, hurting bed and breakfast owners in this case," said Tony Lopez, who rents rooms for US$30-$50 nightly in a three-bedroom, 16th-floor apartment in Havana's trendy Vedado neighbourhood. Those cancelling included two Americans worried about legal requirements, including documenting their spending.

"We get a lot of Americans. We're alarmed," said Eliset Ruiz, manager of a nine-room bed and breakfast in Trinidad. "We've had a lot of cancellations for June and July."

Alex Bunten of Charlotte, Vermont, hoped to go to Cuba with his girlfriend in August "without the hassle of tour groups and schedules and such. We like watching the world go by, eating good food, not being herded by an umbrella-holding, annoyingly interesting tour guide".

But Bunten nixed the idea because under the new rules, only licensed tour operators can take Americans to Cuba on "people-to-people" trips. That's "too much of a hassle," Bunten said.

Tour operators "should be opening champagne" because of the new policy, said John Caulfield, former chief of mission of the US Interests Section in Havana and co-founder of the nonprofit Innovadores Founda-tion, which seeds innovation in Cuba.

In theory, the new rules should spur "an increase in demand," said Access Trips CEO Tamar Lowell. But some Americans "will be confused by the new policy," wrongly assuming that all Cuba travel is now off-limits.

"The travel operators are going to have to do some work to make people aware that if you go with us, it's OK," said Caulfield.

"Are we going to see business fall off?" said Classic Journeys President Edward Piegza. "We could. But it could be good for us."

 

HEFTY COMMISSIONS

 

The new rules also ban Americans from doing business with entities controlled by Cuban military and intelligence agencies, including some 50 hotels.

Many tour operators say that's no problem because they already use privately owned villas, casas and eateries, and engage with local guides, entrepreneurs and artists.

Caulfield said the Cubans can also fill up hotels that are off-limits to Americans with tourists from other countries, thereby freeing up rooms elsewhere for US groups.

Meanwhile, small bed and breakfast owners plan to create informal associations of neighbouring businesses so they can accommodate larger American groups.

Piegza said lodging costs increased last year but are coming down, allowing Classic Journeys to drop tour prices from US$4,995 for four days in Cuba to US$3,995.

But Lowell thinks prices could go either way. With fewer individual Americans travelling, private lodging options could increase, driving prices down. But if tour groups forced out of military-controlled hotels start booking private homes, prices could stay high.

Hotels aren't an issue for cruises because passengers sleep on the ships. But Carnival Corp says even its activities on the ground in Cuba already comply with the new rules. "Many of our current tours have been designed with small family-run operations to give our guests an authentic Cuban experience," said Carnival spokesman Roger Frizzell.

Others are revising itineraries. "We have had to redesign our women's trip to Cuba," said Phyllis Stoller from The Women's Travel Group, which plans a trip for 15 in March. "Our original operator had us visiting some rural areas that are apparently owned by the military."

Meanwhile, private entrepreneurs worry that the government may not allow US tour groups to simply shift their business from state-run hotels to the private sector, at least not without hefty commissions. In the decade since President Ra?l Castro began allowing more private-sector activity, the government has viewed entrepreneurs as both vital sources of economic growth and as dangerous competitors for sluggish state-run businesses. Because tour groups are required to use government buses and guides, the government controls their movements and requires many private businesses that receive tour groups to sign contracts that include commissions for the government.