Cuban challenge for hotels

Havana, Cuba – 10 May 2017 –
Cuba represents a “huge” but challenging opportunity for US hotel, cruise and airline companies as American visitors to the Caribbean island could increase as much as sevenfold by 2025, according to a report by the Boston Consulting Group.

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As many as 2 million Americans could visit up from 285,000 last year, excluding Cuban Americans, the BCG study estimated.

Given tourism infrastructure is already creaking, that means there are business opportunities aplenty but US companies must learn to navigate a centrally-planned economy with its quirks, Reuters reported.

US travel to Cuba has already surged, albeit from very low levels, in the last two years since the former Cold War allies announced a detente and the Obama administration eased travel restrictions to the island.

“The reality is that US travel to Cuba is in its nascent stages, and all the players are still learning how to make it work,” the report said. “Success, as with most things Cuban, will require unusual – and often unorthodox – approaches.”

The Cuban government aims to double hotel capacity by 2030 through partnerships with foreign companies, it pointed out. So far, Starwood is the only US hotel company operating in Cuba.

Instilling a hospitality mindset in tourism workers who were mostly state employees, even at US-owned companies, on low wages could be challenging, it noted.

Poor service sat particularly badly when rooms were “extremely expensive for the region”.

“The risk is that US travellers who visit Cuba and stay at a hotel that is part of a brand they trust will experience prices much higher than usual – and more customer service,” the report read.