Let’s play word association. What’s the first thing that comes to mind when I say Cuba?
A short while ago, I bet you would have said beaches, cigars or political events associated with the island country. But, today, the word that seems to be popular is opportunity. A word that here, in the U.S., had not been associated with Cuba for decades. And, then, the announcement of thawed relations hit the news.
What does the restoration of diplomatic relations mean to travel, tourism and the hotel industry? There’s hope, mixed with healthy caution, as hotel executives and brands contemplate the ability to do business with our estranged neighbor, which has not seen significant real estate development in 50 years. It’s an “ideal” destination, due to its proximity to the States, miles of undeveloped beachfront and the eagerness of Americans to visit the “forbidden fruit.” But, with this opportunity comes questions: What does it mean for U.S. investors, developers and hotel operators in terms of who is positioned to enter the market, and for Cuba in terms of inventory?
As normalization with Cuba slowly opens the doors to us, there’s the chance for U.S. hotel companies to join their European and Canadian counterparts who have already established themselves there. When American businesses are allowed in, will you set up shop to operate there? Where? While beachfront resorts may be the obvious attraction, there are historic towns with strong heritages that will draw nostalgia-seeking Americans who want to experience the “time-capsule” Cuba of the 1950s and ’60s, if/when travel restrictions are lifted. The “virgin” Cuba, unspoiled by capitalism, accessorized with vintage cars and Latin flavor.
Is the current supply of Cuban hotels ready for this? And, are savvy American tourists ready for the local operations that currently dominate the Cuban market, or do we want the standards we’ve become used to? Maybe this is where opportunity lies. Will the aging infrastructure and need for renovation mean new hotels? If so, will an American footprint change the face of the Cuba that tourists are clamoring to see?
It’s a complicated waiting game, navigating Cuban bureaucracy, property laws and government ownership. Whether the obstacles and risks of being the first American businesses to this tourism-rich market are easily overcome remains to be seen but, in the meantime, as you assess the progress, Cuba can now mean strategy. And, that is a word with which we’d all like to associate.