Marlene's View from the Hill

April 17, 2009
Letting A Little More Light In

Earlier this week, President Obama began to take steps to lift travel and some financial sanctions imposed by the U.S. government against Cuba.  These renewed freedoms only apply to Cuban-Americans with family in Cuba, but I believe they are the first positive steps to opening up our neighbor to travel by Americans once again, eventually creating an invaluable opportunity for American-owned hotel investment. 

AH&LA is part of the Cuba Working Group, an ad hoc coalition of groups seeking to change U.S. policy towards that nation.  We believe that our early involvement in this issue will lead to more opportunities for our member’s investment choices.

Our new president has some allies in Congress who also see our relations with Cuba needing a new direction.  Two bills (S.428 and H.R. 874) seek to completely remove the travel restrictions for ll Americans.  Sen. Byron Dorgan (D-ND), one of the sponsors, held a press conference on March 31 announcing his bill.  “[We] believe engagement with trade and travel is the best way to promote democracy and open up those countries,” said Dorgan.

He’s absolutely right.  This action to open up Cuba will encourage more people to travel, both domestically and to our closed neighbor.  Ordinary Americans mingling with Cubans is a very powerful way to spread the message of freedom.  But both bills, and President Obama’s initiative, are only the first steps.  None of these actions remove the restrictions on American companies to invest in Cuba.  The U.S. trade embargo restricts any investment in Cuba by American corporations, even going so far to punish the American subsidiaries of non-American hotel companies if they invest in that island nation.  If our hotel corporations were allowed to invest in Cuba, it would help many of our members’ corporate bottom lines.

Investment in Cuba by American hotel corporations is a natural continuation of our long-time relationship with that country’s travel history.  Americans in large numbers once visited Cuba and stayed in American-owned or managed hotels before the blockade was imposed in 1961.  The blockade once had a Cold War policy objective, but that disappeared when that strategic conflict sputtered to a close over fifteen years ago.  

The American Society of Travel Agents estimated in 2007 that nearly 1.8 million Americans could visit Cuba in the first three years after travel rules were loosened.  A sudden influx of more Americans will create a lodging crunch, since all the visitors will need a place to stay.  There are only about 46,000 hotel rooms in Cuba, 17,000 of them centered in one beach resort.  To give you a comparison, there are more hotel rooms in the Miami Beach area than there are in the entire nation of Cuba, an island the size of Pennsylvania.

The increase in air travel and cruises to Cuba will create a ripple effect throughout the U.S. hotel and travel industry and would produce $1.2 billion to $1.6 billion a year in revenue, according to a 2002 economic study, creating perhaps as many as 23,000 jobs for Americans.   Jobs in the U.S. and Cuba would be created for management, for construction, and for the many support operations modern travel needs as it moves people to their destinations.

I believe opening up Cuba to travel is a first step to take in fostering better and more open relations with the Cuban people.  While Cuba won’t be open for business in time for my June honeymoon, maybe it will be a destination for one of my anniversaries in the future!