David Cogswell | September 21, 2015 12:39 PM ET
Stand by for Cuba's Upcoming Renaissance
Last week when the Obama administration loosened more restrictions on trade and travel with Cuba, the move elicited a big ho-hum from the travel industry. Most of the changes do not target the travel industry particularly, except for making it easier for Americans in Cuba to get access to banking services. But the main reason for the muted response from the travel industry is that in the nine months since President Obama initiated the opening of trade and diplomatic relations with the island nation, most of Cuba’s capacity for welcoming tourists has already been absorbed.
With the cruise industry, the airline industry and the mass market vacation packagers all moving as rapidly as possible into the Cuba travel space, the big issue going forward is now capacity.
The rush to Cuba that was already taking place under the people-to-people travel policies accelerated when Obama announced the loosening of restrictions. And in the intensified rush that followed, the lodging capacity of Cuba was quickly exhausted.
Now capacity is the big issue for the foreseeable future. Until the multinational hotel companies manage to construct new hotels in Cuba, the capacity issue is going to create a ceiling for growth in tourism to Cuba. So that is the end of the story for a long time to come.
Or is it?
Before we put these issues on hold and resolve to look again in a year to see how much progress has been made in building new hotels, let’s remember that we are dealing with Cuba, a country that is like no other.
When it comes to resourcefulness, the Cubans have shown their capacities to be beyond what anyone could expect or imagine. Under economic embargo by the U.S. for half a century, Cuba has served as a laboratory for demonstrating the unlimited capacity of human resourcefulness and creativity.
Just look at what the Cubans have done with their cars. When the economic stranglehold was placed on Cuba in the early '60s, no more cars were coming in from America, and most of the people were too poor to buy imports from Japan or Europe. It would have seemed that the situation was blocked, virtually hopeless. The expectation was that the embargo would bring the country to its knees in short order, but that didn’t happen. Instead, the Cubans practically performed miracles with the resources they had.
They turned adversity into the creation of an art form in their antique cars. When they couldn’t get replacement parts for the old cars, they just built new parts in their machine shops and kept those cars on the road. If the Cubans had not done that, it would seem to be impossible.
Similarly, look at what Cuba has done with its medical practices. While we in the U.S., the richest country in the world, struggle to provide healthcare to our population, Cuba has built a world-class medical system that provides healthcare to all its citizens without charge, and provides cures and technologies that it exports to the world.
Cuba’s medical systems are so impressive that Margaret Chan, director-general of the World Health Organization, cited Cuba as an example for the rest of the world to follow. Cubans have a higher life expectancy and lower infant mortality rates than the U.S.
Visiting Cuba in summer 2014, Chan said, “Cuba is the only country that has a health care system closely linked to research and development. This is the way to go, because human health can only improve through innovation.” Chan applauded “the efforts of the country's leadership for having made health an essential pillar of development"
So back to the travel industry and the lodging capacity issue, I predict that the Cubans will respond with the same kind of creativity they have exhibited in the past.
In recent years, the Cuban government opened up the possibility for Cubans to open their own restaurants and inns. This has resulted in the proliferation of many new boutique restaurants and B&Bs. There is a new wave of entrepreneurship sweeping the island. The sublime creativity of the Cuban people has been given new channels in which to express itself.
A gigantic opportunity has been created with Americans being freed to visit Cuba, and as American capital floods into the country, the Cubans are going to perform virtual miracles with it. And you can bet that the new wave of inns and restaurants will be as impressive as what Cubans have done with their cars.
The multinational hotel chains will be in there and they’ll be working feverishly to take advantage of the new opportunities. But what will be even more impressive will be the efforts of grassroots Cubans, the new wave of entrepreneurs that are springing up on the island.
The multinationals had better move quickly, because the individual Cuban entrepreneurs will certainly move like lightning to take up the slack. It’s going to a great show.
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