Inside How Carnival Accomplished What Others Have Not in Cuba Negotiations
Photo by Barry Kaufman
Following today’s news that Carnival Corporation has received approval to operate its Fathom brand with all passengers onboard – Cuban-born American citizens included – CEO Arnold Donald hosted a conference call to further detail the final go-ahead. The company's historic first cruise is now just nine days away.
The decision is not just between Cuba and Carnival, but is a revision of a decades-old Cuban edict that will apply to all cruise lines winning approval to sail between the U.S. and Cuba. The changes become official on April 26, per Cuban officials.
"This is an extraordinary and very positive outcome from discussions we have been having for quite some time," Donald said. "We've very proud to be part of this positive outcome that will impact so many."
Carnival Corp. began seeking regulatory and government approvals once the Obama administration announced a relaxing of trade embargoes in September 2015. Cuban officials approved Carnival's application during Obama's trip to Cuba in late March.
While Fathom had originally received permission by the Cuban government to sail to the country from Miami, it had a decades-old regulation that prohibited Cuban-born travelers from returning by sea.
Carnival Corp.'s Fathom strategy with Cuba has involved a lot of calculated risks. When asked by reporters Friday if he knew of the issues around Cuban-born Americans traveling on Fathom, Donald made it clear that the company was working to correct the issue from the outset of negotiations.
"We were confident that we would resolve the issues involved here. In planning cruise itineraries, there is a lot of lead time needed for passengers to schedule vacation time and travel agents to help them make plans," Donald said. "We felt confident that we could resolve the Cuban-born restrictions issue ahead of the planned May 1 itinerary when we announced it."
When Carnival got official approval in late March for the cruise, bookings began in earnest.
Once the restriction became more widely known, protests ensued, and Carnival decided to suspend its planned Cuban cruises until the policy was changed.
When the company announced April 11 that it was going forward with the Cuba sailings despite the restrictions for Cuban-born Americans, the news was thoroughly disappointing to Cuban Americans.
Donald said Friday that although he certainly understood the Cuban American community's outrage and faced concerns from Carnival Corp.'s numerous Cuban American employees, he was concerned the protests would derail negotiations.
In making their announcement in suspending the cruise this week, the company both showed concern for human rights over profits and, seemingly, used the delay -- and the potential financial hit to the Cuban ports scheduled to host the cruise -- as leverage to make Cuban officials change their stance.
Donald thanked Fathom president Tara Russell and Carnival Corp.'s general counsel and Cuba native Arnie Perez for their leadership in guiding the negotiations. As to what made Cuba decide to permit all cruise passengers, Donald deferred, preferring to let Cuban officials speak for themselves.
"Cuba has allowed Cuban natives visit from other countries they had previous approved to sail there, so when they approved us in March and we raised the disparity in allowing Cuban-born Americans to visit by air travel but not by cruise, it was a matter of ironing out how to fix that disparity," Donald said.
Now, that means the May 1 inaugural sailing to Cuba will depart as planned, alleviating any worry that those already booked may have had. All obstacles seem to be cleared at this point, an accomplishment other cruise companies have been unable to achieve as of yet.
Haimark had previously announced hopes to sail from the U.S. to Cuba as early as February before corporate bankruptcy concerns derailed their plans.
Pearl Seas Cruises announced in July 2015 that it would have as many as six sailings in March and April ahead of Fathom's plans. But unbeknownst to customers booking sailings, Pearl Seas had not secured Cuban approval and as a result, the company has been cancelling sailings as the scheduled departures approach, with a planned April 15 itinerary the latest casualty.
The approach has left potential passengers and the travel agents booking the cruises irate. So it was no surprise that Donald went out of his way on Friday's call to thank the travel agent community for their support and patience as Carnival Corp. officials worked to make the itineraries official.
“We are set to sail,” Donald says. “I want to acknowledge the travel agents who during this time of uncertainty have continued to book with us, and now the uncertainty is gone. We are clear and free, and for those who were hesitating it is time to book and experience a truly remarkable adventure to Cuba.”
In fact, the May 1 sailing is almost entirely sold out, and while Cuban-born interest has initially been relatively small, the company expects an uptick in reservations across the board. Cuban-born Americans who emigrated before Jan. 1, 1971 will need a special visa waiver.
Those born after that date will need a Cuban passport to sail with Fathom. So it may take time for the government process to catch up with the demand, but from Carnival's side, the bookings are now available to all.
As Donald says, “today’s development will impact countless lives in the future, [and] an opportunity to see and visit Cuba by sea is now available to everyone.”
The Cruise Lines International Association is also happy with the developments and has released the following statement: "Cruise Lines International Association (CLIA) welcomes the Cuban government’s positive and fair decision to allow all American citizens equal opportunity to visit Cuba. The cruise industry understands the power that travel has to bring learning and understanding between nations and cultures.
"Further, CLIA fully supports the rights of all people to travel freely and have the opportunity to experience a wide range of destinations. Every step that nations take towards open access and free interchange between citizens is a step in the right direction."
Donald said the Fathom cruises will hopefully be the first of many of the company's brands heading to Cuba. He said with approvals still needed, no other Carnival Corp. brands will embark from the U.S. to Cuba until at least fall 2016. Industry analysts expect other cruise line companies like Royal Caribbean and Norwegian Cruise Line Holdings to win approval for U.S. cruises to Cuba in the coming weeks.
Cuba's announcement Friday through Granma, the country's official national newspaper, was very basic and to the point, save for an apparent dig at U.S. policy to end the article. Officials stated that their decision to allow their natives freedom to sail is in contrast to ongoing U.S. restrictions that prevent U.S. citizens to travel freely to Cuba.
TravelPulse editor-in-chief Tim Wood contributed to this report.
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