Is The Cruise Industry Ready For Cuba?


When U.S. President Obama and Cuban President Raul Castro made a joint statement on 17DEC, 2014 about normalizing relationship between the two countries, it came “out of the blue," to use the words of Time magazine.

This perhaps explains why the cruise industry response to the development initially appeared so cautious. Statements by cruise industry execs were mainly limited to bland predictions about the “opportunity for the industry."

But fast-forward three months and, politically speaking, all appears to be progressing towards re-establishing relations. Now the question becomes, if that happens will the cruise industry be ready?

During the recent state of the industry panel at Cruise Shipping Miami, moderator Richard Quest from CNN asked the CEOs of the business, “Are you ready for when Cuba opens up legally?"

Responses varied, with Royal Caribbean's Richard Fain surprisingly sounding the most cautious. “Clearly, we'll all comply with the rules and everything else," he replied. “I'm not sure any of us are ready."

Fain went on to say that Cuba represents an amazing opportunity. “Cuba used to be the ultimate destination for cruising," he pointed out. "Are you ready for Cuba?" interrupted the moderator. “No," said Fain bluntly.

Reading through Fain's comments, one got the sense that perhaps having a ship the size of Oasis may not be the right fit for Cuba as a destination, at least at the start. But later in the panel, Fain expertly weaved Azamara's smaller ships and Cuba into a discussion.

“One of the smallest brands in the industry, Azamara, really started this whole process of what they call 'destination immersion', and more time, not less, in the ports," he said. “And you're seeing that's a trend that's growing, because people want both. And in Cuba we will have the opportunity to give people the experience of Cuba but the infrastructure of an industrialized western country."

In contrast to Fain, NCLH's Del Rio sharply snapped his fingers and said, “Like that," when asked about readiness for Cuba. He then added emphatically, “Yes...once the rules allow us to go legally, once the embargo is lifted which is the main restriction."

Del Rio continued that one of the raps on the development of tourism in Cuba is the lack of infrastructure. Indeed, Cuba has 60,000 hotel rooms -- by comparison Florida alone has 370,000. Like Fain, he indicates that plays into the cruise industry's hands.

“The wonderful thing about the cruise industry is we bring our own infrastructure [to Cuba]," says Del Rio. “So yes, we're ready. And I would bet that all of us on this panel are ready to move at a drop of a hat. Today we go to other destinations that are probably less developed than Cuba is if we can go to those places we can certainly go to Cuba. It's only 222 miles from Miami to Cuba."

As for the largest player in the Caribbean region, Carnival Corp's CEO Arnold Donald said, “Certainly we have plans. When the embargo is lifted, we'll be there. We'll put in what we need to put in with cooperation and development."

Meanwhile, as MSC Cruises is based in Geneva, Switzerland, company executive chairman Pierfrancesco Vago reminded everyone, “I'm European. I have no embargo. I'm already there." Vago was referencing cargo ships operated by MSC that currently call in Cuba.

But perhaps it was significant in regards to Cuba that later that same day MSC made its big announcement regarding a return to year-round Caribbean cruising from Miami starting in November 2017. No one is saying that Cuba is the reason that MSC is bringing a new ship to Miami. But having Cuba as an option makes everything more attractive in terms of itineraries from south Florida.

For North American retailers, the opening of Cuba can't come soon enough as that change will undoubtedly create demand for Caribbean cruises. “We're chomping at the bit," said one Caribbean seller. “Opening Cuba is likely to be the thing that revitalizes this entire part of the industry in terms of Caribbean cruising."

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