Selling Cuba: What Agents Need To Know

by Harvey Chipkin
Selling Cuba: What Agents Need To Know

The recent loosening of restrictions on travel to Cuba, a deal announced last night that will allow Marriott to build hotels and one by Starwood to manage two hotels, and President Obama’s historic trip to the island all have raised new questions about what has long been a complicated issue: selling travel to the island.

Veteran Cuban tour operators and inbound agents seem to agree that travel to the island remains “complicated.” While recent changes may represent steps toward mass tourism, selling travel to Cuba is still not easy, and agents have to advise clients in a different way than for any other destination.

Here is how the experts see how recent changes affect agents.

1. This is an opportunity for travel agents.
Tom Popper, president of InsightCuba, said Americans are now more comfortable about going, but “still looking for guidance.” Travel agent business already is rising very quickly—doubling year over year—as a growing number of travelers want to see Cuba “before MacDonald’s and Starbucks arrive. In 10 or 15 years it will be a completely different place.”

2. Individual travel is less restricted.
Last week’s announcement by the U.S. Treasury Department’s Office of Foreign Assets Control permits individual travelers to take People to People (P2P) trips, an option previously available only to travelers in groups. Individuals can certify by signing an affidavit that they will participate in the kind of activities encouraged by P2P, which involves a full schedule of educational activities.

Popper noted that the term “educational activities” has never been defined by the U.S. government, but rather has been left open to tour operators. “Presumably, individuals could purchase a flight, book a hotel room, sign the affidavit, and be okay. Agents should tell clients to keep all their receipts, as well as journals of their activities for an extended period of time. While it might be somewhat of an honor system, the government could ask to look at these materials after the travelers return from their trips.”

The trip still must involve such activities as visiting museums and art galleries, attending music and dance performances, exploring architecture, or even visiting a “cigar sommelier” in his home.

Tour operators say they already have the on-the-ground resources to escort and assist individuals. Eddie Lubbers, founder of the Cuba Travel Network, which has been an inbound agency in Cuba since 2002, has 55 employees on the ground to help individual travelers as they make their way around. They greet visitors as they step off the plane and are either with them or available to them throughout their trips, and a 24-hour emergency line also is provided.

Bottom line: Cuba is still not a “sun and fun” destination. Said Ronen Paldi, president of Ya’lla Tours, “Travelers cannot simply go to the beach; and they must keep their travel records for five years.”

3. Infrastructure remains an issue.
“There simply are not enough rooms, guides, or transportation,” said Paldi. While operators had been saying they did not see major American chains opening hotels in Cuba anytime soon, Starwood has just announced that it will rebrand two existing hotels (one to be part of The Luxury Collection, and one a Four Points by Sheraton) with a third to come soon (also to be part of The Luxury Collection.) And Marriott CEO Arne Sorenson is there now, with the U.S. delegation visiting Cuba with President Obama. Finally, Airbnb, which is already growing rapidly in Cuba, announced it will open its listings in Cuba to all visitors starting April 2.

Still, new hotels are not yet being built. “Cuban hotels have been sold out for some time,” said Popper, and technological challenges remain. For instance, Cuban computer systems don’t communicate with third-party sites like OTAs. “People will book on a website, get a confirmation and there will be no booking when they get there,” Popper cautioned.

4. Prices may rise.
While Paldi predicted “ehe new regulations will cause a price hike, as Cuba is already overwhelmed with American traffic,” Popper noted that overall costs might not. “Costs have been very high because you needed a Cuban guide, a tour operator representative and a driver; now you might only need a driver,” he noted.

5. Money remains an issue.
Travelers can’t use dollars or U.S.-issued credit cards in Cuba; they have to convert to local currency. Popper said U.S. banks are leery of establishing a system only to have it disrupted if a new administration in Washington retreats on normalizing relations. And even when credit cards become viable, there will still be a limited number of credit card terminals and ATMs. It will still be best to travel with cash.

Paying online for the trip is an option. Cuba Travel Network, for instance, accepts online payment and immediately confirms bookings for hotels, flights, car rentals and tours.

6. Service on American air carriers will still take some time.
For now, flying direct means flying on a charters; travelers also may fly through a third country like the Cayman Islands or Mexico. Lubbers believes American commercial carriers may start service in September; Paldi thinks it will be later. Popper said even if it does happen, there is a lot of work to be done on airports and terminals.

7. The big change in 2014 that allowed agents to be paid regular commissions remains intact.
Said Paldi, “We had always worked with agents but on a referral fee basis; the previous changes allowed agents to sell Cuba as they would any other destination and that continues.”

8. The “Gondolas” of Cuba. 
Many Americans want to go to Cuba before artifacts like those 1955 Chevys disappear—but that is not going to happen soon.“Those cars are now part of the Cuban patrimony and are an iconic element of the island” said Eddie Lubbers, CEO of Cuba Travel Network. In the past few years, since these cars have been allowed to become private-sector businesses, thousands have been restored to their original condition. “They have become the gondolas of Cuba,” said Lubbers, “and 8 of every 10 visitors to the island will ride in one either as a taxi or on a tour.” 

9. Everything could change.
Republican candidates have promised to roll back all the changes made by President Obama—so all of the above could be moot come November.

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