U.S. travel to Cuba starts to show signs of recovery

U.S. travel to Cuba starts to show signs of recovery

HAVANA, Oct. 8th Cuba tour operators began to notice a curious thing in the dead of summer this year. Bookings to the island began to increase month over month, following a drastic slump.

“We’ve gotten back to a more normal situation over the past two to three months. Sales have really picked up,” said Collin Laverty, president of Cuban Educational Travel, which offers cultural, educational, event and luxury travel to Cuba.

The spike followed a rough patch when Cuba became a less appealing destination as Irma hit the island’s north coast in September 2017, the U.S. published confusing new regulations for travelers to the island, and the U.S. State Department issued a travel alert warning Americans to reconsider travel to Cuba in the wake of a mysterious ailment that made 26 Havana-based diplomats sick at their homes and two hotels.

The hurricane and publicity about the diplomats’ illnesses “dampened demand right at a time when travelers generally book trips for the winter season,” said Tom Popper, president of InsightCuba, which offers a wide variety of people-to-people tours to Cuba. 

“A year ago it was the never-ending story of the attacks on the diplomats,” said Laverty. Because some of the health incidents, which are still of unknown origin, occurred in a room at the Hotel Nacional and two rooms at the Hotel Capri, the U.S. State Department warned Americans against travel to Cuba, first in a travel advisory last year and then in a Level 3 travel alert that advised travelers to reconsider trips to Cuba.

In August, the alert was downgraded to Level 2, (exercise increased caution) and that has perked up Americans’ interest in visiting the island, said Laverty who has handled arrangements for hundreds of U.S. schools, colleges and universities that have academic exchange programs in Cuba.

Some schools don’t allow any student travel to a country where a travel advisory or Level 3 alert is in place, so they couldn’t offer Cuba programs this year. “Now that the travel alert has been downgraded, many of these schools are going back and reinstating their programs for March 2019,” Laverty said.

Despite the alerts, Road Scholar, which has been offering people-to-people trips to Cuba since 1997, has continued to book its groups into the Hotel Nacional, which the State Department still advises U.S. travelers to avoid along with the Capri even though the health incidents have only involved U.S. diplomatic personnel.

For James Moses, president and chief executive of Boston-based Road Scholar, Cuba remains a safe destination.

“We did our due diligence and talked to the State Department and concluded that these [health incidents] were so specific,” he said. “It’s always been specific to diplomats. The incidents weren’t generalized. Our travelers’ safety is always our top concern.”

Cuba, he said, remains one of Road Scholar’s top-tier destinations. But after enrollment in Road Scholar’s Cuba programs grew by more than 70 percent in 2015 and 2016, it has declined by around 60 percent since then.

Fallout from the travel warnings, as well as other factors, have taken a toll on overall travel to the island. During the first half of the year, the number of international visitors fell by 5.67 percent and travel from the United States, excluding visits by Cuban Americans who are counted in a separate category, was down by 23.6 percent.

For the anemic Cuban economy, tourism has been one of the few bright spots. For the past few years, the government had set ambitious goals for international visitor arrivals and always surpassed them. But after a discouraging first half of the year, Cuba revised its 2018 target for international visitors from 5 million to 4.75 million, still slightly ahead of 2017 numbers.

Even though Cuba made it a priority to clean up its north coast resorts after Hurricane Irma’s swipe last September and completed repairs relatively quickly, the hurricane still took a toll on international tourism during the 2017-2018 winter season.

But starting in May, InsightCuba began to notice interest in Cuba picking up again, Popper said. “There were spikes in web traffic leads and bookings,” he said, and through the summer each month showed growth that was about 25 percent stronger than the previous one, he said.

“That trend was the opposite of what we saw the previous year, and it’s a pretty clear sign to me that the Cuba market is coming back,” said Popper. “The cruise ships are also adding departures and ports.”

Cruising is the big growth segment of the Cuban travel market. U.S.-based cruise lines plan dozens of itineraries for the 2018-2019 winter season.

“If we look at the enrollment now vs. last year at this time, the trend is definitely going up,” said Road Scholar’s Moses.

To keep the Cuba destination fresh, both Road Scholar and InSightCuba have come up with new offerings for 2019 and later this year.

InsightCuba, for example, will be partnering with record label Putumayo World Music for a music expedition in November that will feature meetings with Cuban artists and performances. Over the years Putumayo’s Cuban music collection has sold more than half a million copies. “Now Putumayo can bring people to the music,” Popper said.

“Any company in travel has to constantly renew itself and respond to changing tastes — in Cuba more so than any other destination,” he said. “Not only do tastes and preferences change but the U.S. is also constantly changing how Americans can travel to Cuba.”

Road Scholar offers 12 different Cuban itineraries, including cruises, birding expeditions and cultural and photographic tours. New for 2019 is a cruise that combines Cuba, Jamaica and the Cayman Islands and begins with a lecture in Little Havana on the Cuban-American perspective on U.S.-Cuba relations and a People and Society tour to Havana, Cienfuegos, Trinidad and Santa Clara that includes interactions with Cuban musicians and entrepreneurs.

Tour operators said that a decrease in hotel prices also is playing a role in attracting more visitors to Cuba.

“Another good sign is that prices have gone down in Cuba. We’ll be lowering our prices to reflect that,” said Popper.

During the boom years, Cuban hotels had trouble keeping up with the demand and rates zoomed upward. During 2015 and 2016, visitors found it difficult to get reservations at Cuba’s most popular private restaurants, it was almost impossible to find a hotel room in Havana on short notice, and travelers paid top dollar for accommodations.

But Cuba’s tourism infrastructure wasn’t ready for the sudden increase in demand, and travelers didn’t like paying a ton of money for rooms they often found lacking, said Laverty.

The high prices began to dampen demand not only for Road Scholar trips but also overall travel to Cuba, said Moses. But “now we’re definitely seeing better pricing,” he said, and Road Scholar is passing those savings on to its travelers.

In 2015, the cost per day for a Road Scholar program in Cuba was $471, but by 2017, it had increased to $534. For 2019, the average price will be below 2015 levels at approximately $412 per day.

During the travel boom, rooms at the Saratoga, a Havana hotel where visiting delegations often stay, were going for more than $600 per night. Last weekend a room at the Saratoga was available on a special for $271 a night on Hotels.com. At the more affordable Four Points by Sheraton, which is managed by Marriott, the price for a room last weekend was $104.

More hotels coming on line also have begun to ease the capacity crunch. Cuba recently opened its second five-star hotel, the Grand Packard. The hotel with panoramic views of Havana’s Malecón is managed by the Spanish company Iberostar Hotels & Resorts, for Gaviota, a Cuban tourism brand that is part of the military-controlled conglomerate GAESA.

But while bookings for group tours are picking up, Cubans who rent out rooms in their homes and operate other small private businesses say they’re still hurting from a dearth of individual American travelers who often choose to stay in casas particulares (bed and breakfasts) to get a more authentic Cuban experience.

“American travelers were really helping build that part of the economy and were supporting it,” Laverty said. Many private Cuban entrepreneurs made investments in their properties and businesses with the assumption that American travel would continue to grow. “Now we’re seeing a lot of those investments without returns,” he said.

Recent travelers say private clubs and restaurants are still relatively empty and some private rooms in Centro Habana that once rented for $25 to $30 a night have reduced prices to around $15 in an effort to lure in more travelers.

One place that seems immune to the vagaries of Cuba travel cycles, however, is Miami International Airport, the main hub for U.S. travel, especially Cuban-American travel, to the island. Despite the drop in American travelers during the first half of the year, travel to and from Cuba through MIA continued to grow even as some airlines dropped their Cuba service from other U.S. airports.

Through August, MIA was ahead of last year’s record-setting pace for flights to and from Cuba. From January to August, 550,750 Cuban-bound passengers departed from MIA, a 21 percent increase, and 549,048 passengers arrived from Cuba, 12.6 percent more than in 2017.

And if American Airlines has its way, there may be even more Cuba-bound flights leaving from MIA.

American Airlines asked the Department of Transportation at the end of September for the flexibility to shift its Charlotte-Havana flight to a Miami-Havana route without having to go through lengthy route allocation proceedings in which it would formally give up the Charlotte route and then apply for another Miami route. It also plans to begin a new Miami-Santiago de Cuba route in May.