U.S. Travel Restrictions Halt Timeshare Development in Cuba
Plans for development have stopped until further notice.
In November 2017, the U.S. imposed new restrictions on travel to Cuba, preventing Americans from visiting the country on people-to-people trips as individuals. Instead, Americans can tour Cuba only with an approved U.S. organization. In addition, they are prohibited from staying at hotels or shopping at stores owned by the Cuban military. These restrictions reversed the loosening of travel restrictions under the previous administration and put a hold on the U.S. timeshare industry’s burgeoning attention to the island.
“Up to the end of 2016, the interest from the timeshare industry to enter the Cuban market had increased, and many companies had plans to invest, especially after several U.S. companies got permits to access the Cuban market for traditional hotel business,” says Eugenio Macouzet, senior vice president and managing director, Caribbean, for RCI business development. “The interest is still there, but the industry will wait until there’s better clarity on the U.S. plans for travel to Cuba.”
Although at first glance the restriction on hotels and stores may not sound as if it would impact timeshare interests, it deters travelers by adding another layer of difficulty for Americans visiting Cuba. “For a typical traveler, it is not obvious which hotels are restricted, so the general reaction is to avoid the risk and choose other destinations,” Macouzet says. “This is another factor delaying the plans for timeshare in that market.” GAESA, Cuba’s largest holding company, is on the list of prohibited entities released by the U.S. Bureau of Economic and Business Affairs. GAESA also has a 40 percent share of the country’s tourism market. More than 50 companies fall under it, the most well-known being the Gaviota hotel chain.
To attract U.S. travelers despite the restrictions, Macouzet advises that existing Cuban resorts offer all-inclusive options so Americans don’t have to worry about unknowingly violating the ban on military-owned businesses. Also, resorts may want to highlight how safe Cuba is. “The message has to be that Cuba has many natural destinations worth visiting and that it is perhaps the safest country in the Caribbean, with millions of visitors every year,” Macouzet says.
Meanwhile, timeshare bookings in Cuba by non-Americans continue to increase. “Several non-U.S. hospitality companies have tested the timeshare concept by selling and including Cuba as a destination to their non-U.S. members,” Macouzet says. There’s proven interest in Cuba should there be an opportunity for American timeshare to explore the island nation in the future.
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