U.S. Travel to Cuba Continues to Expand

Since the initial December 2014 announcement that the United States would reopen long-severed ties with Cuba, the hospitality industry has been abuzz over the opportunities the island could provide for travel. Finally, the industry is making headway as the two countries work toward a stronger relationship.

On June 10, the U.S. Transportation Department awarded six U.S. airlines route rights scheduled to Cuba. JetBlue Airways, Silver Airways, Southwest Airlines, Frontier Airlines, and Sun Country Airlines are all free to travel to nine of Cuba’s airports, excluding Havana, as special privileges to land at the site will be awarded late this summer. Soon, there will officially be passengers to fill those seats: Last Thursday, the Senate Appropriations Committee approved an amendment that allows students, missionaries, and Cuban-Americans to travel to the island.

Leonard Vance Wormser, senior managing director of the hospitality division at Latter & Blum, believes that RevPAR will rise in Havana with recently sparked new hotel development. The Ministry of Tourism announced a goal to add more than 100,000 rooms to the island by 2030. In March, Starwood Hotels & Resorts became the first U.S. based hospitality company to enter the market in nearly 60 years when it signed deals to manage three hotels in Havana, and other major U.S. hotel companies like Marriott are actively pursuing business opportunities in Cuba.

As compared to the top U.S. RevPAR markets, Havana ranks as the sixth highest, trailing New York, San Francisco, Oahu, Miami, and Boston. “I think Cuba’s RevPAR will go up 10 to 15 percent per year for a couple of years,” Wormser says. “Cuba is already a hotspot for Europe, Asia, South America, Canada, and Israel—everybody goes to Cuba but the U.S.”

Cuba’s embargo is still in tact, therefore Cuba is still not completely open to all American travelers, Wormser explains. Even though there is new supply coming to the market, it is limited new supply with a plethora of increased travel. Since 2014, travel to Cuba from America increased 171 percent. “The influx of the number of U.S. travelers to travel with an approved reason has risen from 171,000 in March 2015, to double that number in about a year,” Wormser says.

While Wormser is optimistic about continued travel to Cuba, he says much has to change before the average American can visit without an approved reason. “There are a lot of variables that most people sadly don’t control,” Wormser says. “There has to be congruence of an agreement among the House, the Senate, and the president, and there needs to be a law that is executed by the president, and then the embargo lifts.”

The removal of the embargo will most likely occur after the U.S. presidential election, Wormser believes. “The embargo could lift one month after the election, or one or more years after the election. I think it will be sooner rather than later,” he says.

According to Wormser, in third quarter of this year, there will be 110 U.S. flights to Cuba, aided by the recent airline approvals. “Everybody who’s dying to go, and wanted to see it before, is going now, and can go, for all practical purposes.”