Cuba
Come again
Jul 5th 2007 | HAVANA
From The Economist print edition

Plans to revive flagging tourism

WHEN Soviet subsidies abruptly disappeared in the early 1990s, Cuba's communist government saw in tourism an alternative source of foreign currency. The number of visitors rose swiftly, to over 2.3m in 2005, producing revenue of some $2 billion. Now this rapid growth has stopped: last year tourist arrivals fell by 4.3%, and the slump intensified at the start of this year.

Cuban officials publicly blame the drop on the United States. George Bush's administration has cut family visits by Cuban-Americans, from once a year to once every three years, and has been zealous in enforcing a ban on travel to the island by other Americans. But in private the officials admit that this is one problem for which the enemy to the north cannot take all the blame.


Cuba has one of the lowest rates of return visits in the travel business. Most visitors go there once, enjoy the colonial architecture and pristine beaches, and never go back. Tour operators say they get many complaints about poor food and indifferent service.

Many tourists also find Cuba expensive. To buy anything they are obliged to change their money into “convertible pesos”, which are worthless outside the island. In 2005 President Fidel Castro revalued the “convertible peso” by 8%. That did nothing for tourism. Canadians, for example, do not visit because “they love Cuba” but because it is cheap, says one industry source.

Mr Castro seemed to see tourism as nothing more than a necessary evil—and less needed now, thanks to aid from Venezuela and high prices for nickel exports. But his brother Raúl, who took over from him last year when Fidel had intestinal surgery, seems to disagree. Raúl Castro has long headed the army, which runs many tourist businesses.

The government says it will spend $185m over the next three years to improve the island's few marinas and golf courses. There are plans for some 50 “boutique” hotels. Aircraft landing fees, among the highest in the world, are to be cut by 20%. Foreign investors, who only last year were receiving strong signals that they were not required, are now being encouraged to submit proposals.

“This is Raúl at work,” says a Western diplomat in Havana. “Less talk, more action.” The action may go further. One idea is to repeg the “convertible peso” at par to the dollar. Another is to let Cubans stay at tourist-only hotels. That would fill empty beds, and assuage resentment at “tourist apartheid”. If such measures happen, they would be the first clear sign that Raúl is more than just his brother's keeper.