Cuba seeks tourism boost
Despite the global economic crisis, tourism in Cuba is booming, in large
part due to the island's cheap, all-inclusive vacation packages.
By DAVID ADAMS
St. Petersburg Times
VARADERO, Cuba -- On their first day of vacation at Cuba's top beach
resort, Canadian couple Jim and Tammy Bosch enjoyed a midmorning
cocktail in the Club Hemingway lobby bar of the Marina Palace hotel.
''It was minus 30 [degrees Celsius] when we left Canada,'' said Jim
Bosch, 49, a maintenance worker on the Montana border.
Canadian tourists are flocking to Cuba in ever greater numbers, making
tourism a bright spot in the island's otherwise bleak economy. Hit by
three hurricanes, rising prices for food imports and a drastic fall in
the price of nickel, its top export, Cuba's economy ended one of its
toughest years since the fall of the Soviet Union almost two decades ago.
''Cuba is in a very, very dire economic situation right now,'' said
Antonio Zamora, a prominent Cuban-American lawyer in Miami who visits
Cuba frequently. ``They need some sort of boost, and tourism is one
place where it's going to come from.''
Cuba saw record tourism in 2008 with 2.35 million visitors, generating
more than $2.7 billion in revenue, a 13.5 percent increase over the
previous year.
The tourism boom is all the more surprising given the impact of the
global economic crisis on travel to other Caribbean destinations. That
can be partly attributed to the island's relatively cheap, all-inclusive
packages -- as low as $550 a week, airfare included.
The Bosches, part of a 36-strong wedding party, paid $1,078 each for
their all-inclusive vacation at the five-star Marina Palace. The
financial crisis has not hit as hard in Canada, which is easily Cuba's
best client, sending 800,000 visitors last year.
MASSIVE EXPANSION
Cuba recently announced major joint ventures with foreign companies in
the tourism sector: 30 new hotels and a total of 10,000 new rooms, a 20
percent increase.
A 46-year-old U.S. trade embargo bars Americans from vacationing in
Cuba, except for Cuban-Americans visiting family. American visitors
numbered 40,500 in 2007.
That could double after President Barack Obama fulfills a campaign
promise to lift restrictions on travel by Cuban-Americans, who are
allowed one visit every three years. Loosening of regulations limiting
licensed travel to Cuba for academics and cultural exchanges is also
anticipated.
Cuban officials say they aren't planning on it.
''Our philosophy is not to be surprised if it happens, but not to wait
for it to happen in order to continue constructing new hotels,'' said
Miguel Figueras, a senior Tourism Ministry advisor.
Tourism officials hope to entice Americans back to the island's annual
Billfishing Tournament, named after Ernest Hemingway. The 59-year-old
event, held in June, was popular with U.S. competitors until the Bush
administration restricted travel.
''We hope in the next years with a new president, the American boats
will start coming back,'' said Figueras, noting that about 50 U.S. boats
competed in 1999, out of a total of 80.
Cuba needs all the financial help it can get from its tourism sector as
it braces for a tough year, experts say.
Last year, hurricanes caused $10 billion in damage, equivalent to 20
percent of the national income.
TRADE IMBALANCE
''Hurricane recovery needs and high food and fuel prices pushed up
imports 43.8 percent,'' said Johannes Werner, Sarasota-based editor of
Cuba Trade and Investment News.
``As a result, the trade deficit soared by 70 percent, or $5 billion, to
$11.7 billion in 2008, twice as big as in 2007, and it's proportionally
the highest in 13 years.''
Cuba's cash crunch is likely to continue throughout 2009, Werner adds,
although the government plans to slash expenses by half this year.
The state's budget accounts ''simply don't square,'' President Raul
Castro said in a closing speech to the National Assembly on Dec. 27.
Unable to support its pension system, the assembly voted to raise the
retirement age by five years, to 65 for men and 60 for women.
Recognizing the need for assistance, Cuba is on a diplomatic offensive
to improve ties with its neighbors, culminating in December with its
acceptance into the Rio Group, the largest club of Latin American
nations. Castro has received major offers of economic support from
Brazil and Venezuela.
Castro may also open the economy to limited free market measures, some
experts believe. Cuba recently said it would issue new taxi licenses to
private car owners to compete with state cabs.
The government also plans to redistribute idle state land to private
farmers, though the process of handing it out has been slow.
In his speech, Castro repeated one of his favorite themes: the
restructuring of salaries according to employees' productivity, rather
than egalitarian socialist principles of revolutionary sacrifice.
''Let's not deceive ourselves anymore. If there's no pressure, if there
isn't a necessity to work to satisfy my necessities, and if they're
giving me free stuff here and there, we'll lose our voice calling people
to work,'' he said. ``That's my way of thinking, and that's why
everything I'm proposing is going towards that goal.''
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