PHOTO: Will Americans be visiting Havana from cruise ships in the near future? (Photo by David Cogswell)
If Cuba opens up to U.S. tourists, it would have an immediate and impressive impact on the cruise industry. For decades, cruise ships have sailed around the 780-mile-long island, which sits smack-dab between South Florida homeports and popular islands such as Jamaica and Grand Cayman.
"It needs some lipstick and love to bring things up to standard," said Vicky Garcia, the Cuban-American COO of Cruise Planners. "But it could be very exciting."
The largest island in the Caribbean, just 230 miles from Miami, "has long been in the cross-hairs of the American cruise lines," notes Robin Farley, a financial analyst with UBS who follows cruise companies. Cruise lines undoubtedly have plans so they can spring into action once Cuba does open up, but it's too early to say when they might be able to go there.
"Cuba … presents numerous opportunities from a cruise industry perspective," Carnival Corp. spokesman Roger Frizzell said. "Some infrastructure for cruising already exists in the country, along with several ports, so it offers great potential, but there are other issues that will need to be taken into consideration if this market opens up."
Those considerations would include the condition of the infrastructure and port facilities, along with regulatory and policy considerations, according to the Cruise Lines International Association. Cruise lines would also have to evaluate market stability, crime and security issues, and explore possible shore excursions.
But cruise lines could be the immediate beneficiary because they can move ships there faster than hotels catering to Americans could be built.
"Havana is a natural deep-water port, and we believe operators could build dockside infrastructure on a much faster timeline than hotel infrastructure," Farley said. "It could take years to develop 3- to 5-star American-branded hotel product in Cuba, favoring cruise ships as the way to visit the island in the medium term. Itineraries could be sold with just several months' advance notice."
Cuba's capital, Havana, at one time had a modern cruise facility when two European lines, Costa Cruises and Pullmantur, operated from there. But both pulled out when they were acquired by American companies; Costa was acquired by Carnival Corp. in 2000 and Pullmantur by Royal Caribbean Cruises Ltd. in 2006.
A Canadian company called Cuba Cruise will begin its second winter season on Dec. 19, operating seven-night cruises from Havana or Montego Bay through March 30. It operates the 1,200-passenger Cristal chartered from Louis Cruises.
"While Havana may not currently handle the largest ships, we believe operators would make the investment to build dockside infrastructure," Farley wrote in a research note. "Many contemporary ships have been designed to be able to operate in Havana Port."
Even without U.S.-based cruise ships, Cuba still expects about 200 cruise ship visits during the 2014-15 winter season, according to data from the Cubatur travel agency reported by the Latin American Herald Tribune. The article said the ports with the most cruise passengers are Havana, Cienfuegos in the central part of the island, and Santiago de Cuba in the east.
The island is "exciting, sexy and cool," Garcia said. "It's not just a little bitty island. It offers big city stuff and rural areas." Not to mention Cuban dance, music, cigars and old American-built cars.
Farley predicts a lot of pent-up demand if and when Cuba does reopen to Americans.
"Cuba could prompt many cruise passengers who've already been to many Caribbean ports to return to a Caribbean itinerary to see a unique and novel port that has gone unseen by many Americans for decades," Farley said.
She noted that RCCL has about 44 percent of its total capacity in the Caribbean for 2015, while Norwegian Cruise Line Holdings has about 45 percent. Carnival Corp.'s Caribbean capacity is about 34 percent all told, but it's much higher for Carnival Cruise Lines.
The Fun Ship brand "is still significantly below pre-recession pricing, so it could benefit strongly from improved Caribbean demand," Farley said. "So all cruise lines are heavily exposed to increases in demand for Caribbean itineraries, though it remains to be seen if and how port access will be determined."
For the latest travel news, updates and deals, subscribe to the daily TravelPulse newsletter.
Topics From This Article to Explore
