Since Cuba’s recent opening to foreign investment, the tourism sector has been promoted as one of the key attractions for foreign capital.
As explained in the 2016-2017 Portfolio of Foreign Investment Opportunities, international participation in the sector is supported by “a tourism product characterized by the hospitality of its people, exceptional natural attractions, local historic heritage, rich artistic and cultural life, the unique healthcare situation, political stability and safety for tourists.”
As such, the policy for this sector features 110 projects (16 more than in 2015), to build or rebuild hotel facilities and complementary infrastructures, as well as to diversify the administration and marketing of these facilities by recognized international chains.
As far as activities beyond hotel facilities are concerned, the island proposes to invest primarily in real estate developments, the management of 100% Cuban marinas, the creation of fishing and diving centers in protected areas, the establishment of an international equestrian club, and the construction of theme parks using the latest technology.
For these purposes prioritized are the areas of Guardalavaca, to the north of Holguín; the central southern coast, specifically Cienfuegos; Santa Lucía beach, north of Camagüey; the tourist resort of Covarrubias; and Havana.
As stated by the Ministry of Tourism (Mintur) on several occasions, the presence of foreign investors will be exceptional in Trinidad, Varadero and Cayo Largo; while projects are already underway in Old Havana and the island’s northern keys.
Visitor arrivals to the country, which reached 3,524,779 in 2015, and 4,065,577 in 2016, confirm the progress of this industry in Cuba. While still insufficient to meet demand, the island’s hotel capacity, which at the end of March, 2016, included a total of 65,175 rooms, has now risen to 66,547, and a further 4,020 hotel rooms are expected to be added over the course of this year.
AN IMPORTANT BOOST TO CUBAN TOURISM
Immersed in this highly favorable context, the 2017 International Hotel and Tourism Investment Conference (SAHIC) will be held in Havana May 15-16, 2017.
Cuba, which event organizers have referred to as “the Queen of the Caribbean,” will thus host the most important annual Latin American event for the promotion of businesses related to the leisure and travel industry, which will soon reach it’s tenth edition.
According to SAHIC President and founder, Arturo García Rosa, it is a privilege to be able to hold the first Caribbean edition of SAHIC in Havana. To date, the annual event has been held in the South American cities of Buenos Aires, Rio de Janeiro, Cartagena de Indias, Santiago de Chile, Lima, Bogotá, Quito and Guayaquil.
With a long and established history in the tourism sector, SAHIC is defined as a space for businesspeople and companies to come together to exchange experiences and discover new opportunities.
Those who have projects or ideas to carry forward in the sector attend the event, and they are joined by those who can bring these projects or ideas to fruition, that is, powerful investors, developers, banks, hotel groups and chains, architects and designers.
Likewise, the upcoming event, which in the words of García Rosa “will be hard to forget,” will enable more than 200 participants from 30 countries in the Americas, Europe, the Middle East and Asia, to become involved in the promotion of Cuba’s economic development.
The SAHIC President assured that the annual event has become the most significant in tourism investment, and the world’s major investors want to be present, “be they experienced businesspeople and entrepreneurs, or those who are starting out.” He added that the initiative has served as the starting point for successful small, medium and large Latin American tourism projects.
García Rosa acknowledged, “Although some of the participants have sporadically visited the island in the last two years, next month they will all meet each other for the first time. What has been achieved so far is just the tip of the iceberg; the most spectacular is yet to come. There are huge expectations that Cuba will be able to respond to and even surpass.”
A DESTINATION WITH ENORMOUS POTENTIAL
Despite Cuban tourism having seen significant growth in recent years, there are striking prospects for the future of “a safe country, which has clearly established the rules of the game for those who want to do business, and a spectacular, hospitable people who have preserved their culture,“ García Rosa explained.
According to event organizers, the island has the potential to become the second most important tourist destination in Latin America, after Mexico, and one of the leading in the world. In order to fulfill this potential, it must be able to cater for 10-12 million tourists each year.
In this regard, García Rosa also emphasized that Cuba is an attraction (if not the attraction) for future global tourism, and the arrival of new investments will allow for a higher quality industry. Although it only represents a small element in the enormous efforts that Cuban authorities are making toward this objective, the event president hopes that SAHIC 2017 can mark a before and after for the island.
Despite the continuing U.S. economic, commercial and financial blockade against Cuba, businesses from that country are interested in what is happening on the island. According to García Rosa, the U.S. should have the broadest participation in SAHIC.
It is worth emphasizing that most of the companies supporting the development of the event are from the North. Undoubtedly, as this expert pointed out, they will have their best businesspeople in Havana for SAHIC Cuba 2017.
David Scowsill, president and CEO of the World Travel and Tourism Council, an institution that brings together all companies in the sector, will be in Cuba for the event. For the seventh consecutive year, 2016 saw record numbers of travelers. According to data from the World Tourism Organization, 1,235,000,000 tourists traveled abroad during the past year, mainly to Europe.
Cuban Deputy Minister for Tourism, Luis Miguel Díaz Sánchez, believes that the event to be hosted at Havana’s Melia Cohiba Hotel will act as a complement to the largest annual event in the industry held on the island, the International Tourism Fair, FITCuba 2017, which will take place May 3-6 in the eastern province of Holguín.
According to the official, with the help of the Ministry of Foreign Trade and Investment, the Conference will be an unmissable event for those wanting to find out how to invest in Cuba, especially in terms of hotel improvements and the development of theme parks and real estate associated with golf courses.
Díaz Sánchez emphasized that SAHIC Cuba 2017 will allow visitors to learn of the natural, historical and cultural wealth of the island, and to attend a panel composed of international sector companies, “successfully established here for many years.” Likewise, there will be other service providers such as the Ministry of Communications, the Construction Ministry and other authorities, to show what they can provide to the sector, a key driving force of the island’s economy.
Meanwhile, Mintur hopes that the event will facilitate new business ventures. The presence of all Cuban tourism companies has been confirmed, which will make reference to their development plans; and well as of the Civil Aviation sector, which has an important impact and will be accompanied by those international airlines operating in Cuba; and the entity in charge of the expansion of Havana’s José Martí International Airport.
In the lead up to SAHIC Cuba 2017, José Daniel Alonso, Mintur director general of Development, Investments and Business, insisted that the Portfolio of Foreign Investment Opportunities offers project developers the possibility of accompanying the expected development in the Cuban tourism sector. He noted that of the opportunities presented, “more than 50% enjoy some level of interest or are in preliminary discussions between domestic and foreign companies.”
The Mintur representative noted that another relevant issue that is already being worked on is the updating of the Portfolio for 2017, which will feature more than 150 projects, not only related to the construction of new infrastructure, but also to the remodeling of that which already exists.
While there are important plans for Havana, Trinidad and Holguín, efforts are currently directed toward boosting tourism in Santiago de Cuba, “to make the island increasingly attractive to foreign visitors.”
Among the highlights of today’s Cuban tourism development, Daniel Alonso noted that this month the Gran Hotel Kempinski Manzana will open in Havana, with this world-class hotel group, and Banyan Tree, from Singapore, will commence operations on the island, concentrated at beach resorts.
Meanwhile, firms from Southeast Asia and the United States have taken steps to learn more about the special opportunities for the construction or reconstruction of nautical and marina facilities, “a fundamental element for the increase in room capacity,” Daniel Alonso concluded.
As for real estate, the Mintur official explained that the third project for the construction of a golf course in Punta Colorada, Pinar del Río, has been approved, which will be the largest on the island and one of the biggest of its kind in Latin America. This initiative will be the result of a joint venture with Spanish group La Playa Golf & Resorts S.L.
Similarly, he added that the fourth project of this nature has already been presented, with the intended area of El Salado, in the Mariel Special Development Zone, and is expected to be approved this year. “Three other negotiations are progressing very well, which we expect to close by the end of 2017 or early 2018. By then, we should have between six and seven real estate projects.”
However, Daniel Alonso also acknowledged that the two projects already signed (one with British capital and the other with Chinese, in Carbonera and Bellomonte, respectively) have been somewhat delayed, “but their work schedules should be back on track by the second half of 2017.”