Under the Radar, Cuba Market Climbs Back

After being hit with a devastating wave of bad publicity in 2017, the Cuba travel market is climbing back up, though the movement is largely out of view of most media coverage. Tom Popper, the president of Cuba specialist insightCuba, has seen a 30 percent rise in business in May, June and July.

For much of the American public, President Trump’s announcement on June 16, 2017, that he was fulfilling his campaign promise to “[cancel] the last administration’s completely one-sided deal with Cuba,” meant that travel to Cuba was prohibited to Americans again. But that was not the case. Cuba was and still is practically as accessible to Americans as it was during the Obama administration, with the exception of the solo travel option, which actually was canceled.

Bad news comes in threes

President Trump’s announcement was a body blow to the public perception of travel to Cuba, and confused prospective travelers to Cuba. Then, to further muddy the waters, came two more highly damaging news stories. In the phrasing of Popper, the industry hit a “trifecta” — and not a good one.

The three strikes were: Trump’s Cuba announcement, Hurricane Irma, and a U.S. State Department Travel warning against travel to Cuba.

“First, we had the effect of Trump’s announcement in June,” said Popper. “At a press conference in Miami, he said he was going to do away with Obama’s wrong-headed Cuba policy, and that headline ran consistently in all the major dailies and on cable news. Most Americans thought it meant that you were previously able to travel to Cuba but now you’re not. But with Trump’s executive order, very little actually changed.”

Though there was little change, the public perception that Cuba was off limits again lingered. Then came Hurricane Irma.

“Irma ravaged the Caribbean,” said Popper. “It touched North Central Cuba. Water came into Havana and people saw pictures and thought, ‘Oh no! Cuba is devastated!’ And then a couple weeks after that, we had the State Department Travel warning.”

After the hurricane passed, the damage to Cuba was minimal, but the image of a flooded Havana had resonance, and it was another blow to public perception of travel to Cuba.

Strike three

For many Americans, a State Department Travel Warning is enough to wipe a destination off their travel maps, so the travel warning on Cuba was highly damaging, though the justification for the travel warning was weak. The warning was a response to an outbreak of illness in the American Embassy. The source of the illness was never determined, and the disease never affected a single tourist or, in fact, anyone outside the embassy.

But, when a State Department employee dropped a hint of the possibility of “sonic attacks” as the possible cause of the illness, the media picked up on it and soon it became conventional wisdom that there were sonic attacks launched against Americans in Cuba.

Since the warning came from the State Department, it carries a lot of weight for most Americans, as it should. But those who read the follow-up stories on the alleged “sonic attacks” learned that it was eventually established that there were no sonic attacks in connection with the illness at the embassy.

By then, the meme was well established, had done its dirty work, and so the State Department warning became the third blow in a devastating combination that staggered the Cuba travel market.

June, July and August of 2017 were soft. Part of the new Trump policies had not been included in the original announcement in June and were expected to be made public by the government in about 60 days. While people were waiting for the other shoe to drop, it brought more uncertainty into the market.

“Our prediction was that once the State Department came out with new hotel regulations, travel would pick up again because there would be less confusion in the marketplace. But Trump gave a confusing message. He said he was doing away with the Obama rules, but then what he signed gave a different message. Uncertainty causes pause.”

Happy New Year

That was then, and January brought a new year, fading memories of the bad news stories of 2017, and the Cuba travel market began to stir again.

“In January, bookings started to pick up,” said Popper. “Not a major increase, but now, since May we’ve seen 30 percent increases each month. We just finished the third month. To me that spells a trend.”

According to the recently released figures, visitations were up in June of 2018 over June of 2017. “And that says something,” said Popper, “because visitations in June 2017 were not yet affected by Trump’s announcement. Those were still Obama wave bookings.”

Hidden airlines

The airline story in Cuba is actually much rosier than how it is usually portrayed. Generally speaking, air fares are lower and accessibility is greater than ever before. One reason this is such a well-kept secret is because flights to Cuba do not appear on Expedia, TripAdvisor or Orbitz.

“You still can’t purchase commercial air via Expedia or the OTAs,” said Popper. “You have to buy it directly from the carrier. Many travelers don’t know who flies to Cuba. You have to go to the sites of your preferred carrier and poke around, or go on Sabre.

“A lot of people go to Expedia, TripAdvisor or Orbitz and are turned off by fact that they can’t book, so they assume there must be something wrong. You have to book directly through the airlines. That is due to regulations. The airlines are required to ask you to hit ‘accept’ on the affidavit pop-up that you are traveling under one of the 12 categories.

“The airlines have a responsibility to OFAC [Office of Foreign Assets Control] to have travelers confirm that they are traveling there for legal purposes. I think that’s kept Expedia and the OTAs out of the market.”

While most people don’t hear about it, flights to Cuba are more accessible and more affordable than ever before. Much of the media coverage has focused on the companies that have pulled out, and followed the narrative that the Cuba market has fallen. But that’s only part of the story.

“What has happened is that as some airlines have pulled out, Delta and American have taken over their routes,” said Popper. “And they’ve been figuring out the size of aircraft and the best frequency of flights. When airlines entered the Cuba market in 2015, it was a brand new, untried market for them. They had to figure the market out from scratch.

“There was not a single domestic carrier involved in the Cuba market on a commercial basis since 1962. So, it is completely new, and the market is evolving and changing, people are traveling for different reasons than in the past. So, it has been a market in flux. The result is that you now have coastal U.S. carriers providing nonstop service from a few gateways, and also connecting service through those gateways of New York, Houston, Atlanta, Miami. And the air fare is for the most part inexpensive.

“I can fly to Havana from JFK in three hours, exactly the same time as it takes me to fly to Miami, for $300 round trip. Even if you’re going from Chicago or Houston or New York, it’s easy, inexpensive and it makes it so much more accessible than it ever was before.”

travelmarketreport.com