Forbes: Trump's Cuba Travel Policy Leaves Heads Scratching

Andrew Bender , Forbes

Just as travel and tourism to Cuba from the United States was heating up, President Donald Trump made an announcement last Friday that will cool it down, probably way down. He said he was "canceling the last administration's completely one-sided deal with Cuba."

While it's not exactly a cancellation, what it is is, at this stage, unclear.

"There are a zillion contradictions," says Julia Sweig, senior research fellow and Cuba expert at the Lyndon B. Johnson School of Public Affairs at the University of Texas. "There is no policy or legal coherence to what they have announced."

A television set in a house in Havana shows U.S. President Donald Trump announcing his new Cuba policy. (AP Photo/Ramon Espinosa)

For example, American tour operators, cruise ships and airlines will still technically be able to operate into Cuba, and U.S. citizens can still purchase and bring home Cuban products like rum and cigars; both of these were off limits before the Obama administration relaxed rules in 2014. But the new policies put in two important restrictions:

Make it illegal for Americans to patronize facilities related to the Cuban military, and Make individual travel to Cuba far more difficult for Americans. Currently this is through a program known as people-to-people.

The military issue first. "The state-run tourism organization, GAVIOTA, is owned by the Cuban military, and it owns the majority of tourism infrastructure on the island," says Marguerite Fitzgerald, a partner at the Miami office of Boston Consulting Group in Miami and the author of BCG's report on Cuban tourism. "Americans will not be allowed to stay in Cuban hotels, take Cuban buses or rent cars."

A pedestrian passes in front of renderings displayed on a hotel under construction in Havana, Cuba, on Friday, June 16, 2017. Photographer: Eliana Aponte/Bloomberg

Meanwhile, the cutback in individual tourism will mean that Cuba's growing network of home stays will take a hit. Airbnb says that 560,000 guests have paid some $40 million to private hosts around Cuba since the company entered the market in April 2015. This in a country where, Airbnb says, the average monthly wage is $30. This year, Cuba has been Airbnb's ninth-largest market for Americans heading abroad.

The announcement from the White House directs the Departments of Commerce and the Treasury to come up with regulations within 30 days. But, Sweig says, "I expect that when the regulators try to write the new regulations, they will become mired down."

"I guess the Trump people will publish a map of Cuba with all of the places Americans won't be able to go to buy a bottle of water, to sleep, etc.," she adds.

Vintage cars in Havana. Photographer: Eliana Aponte/Bloomberg

Meanwhile, tour and travel operators are in limbo. "It remains to be seen which travel companies, cruise lines and tour providers will be able to successfully navigate the new regulations and which will cease their operations in Cuba," says Jennine Cohen, managing director for the Americas at San Francisco-based Geographic Expeditions, which has operated tours to Cuba for 17 years.

"GeoEx works primarily with small and charming B&Bs, which have no connection to the Cuban military and should not be affected," she says.

More long term, Cohen says, "As we have successfully operated trips on and off since 2000, we have adhered to [the U.S. government's] changing policies and enforcement over time and will continue to do so."