Identifier
Created
Classification
Origin
08HAVANA279
2008-04-02 20:42:00
CONFIDENTIAL
US Interests Section Havana
Cable title:
CUBA: TOURISM APARTHEID DEALT A BLOW, MAYBE
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C O N F I D E N T I A L HAVANA 000279
SIPDIS
SIPDIS
DEPT FOR WHA/CCA
E.O. 12958: DECL: 03/25/2018
TAGS: ECON PGOV PINR PREL CU
SUBJECT: CUBA: TOURISM APARTHEID DEALT A BLOW, MAYBE
REF: A. 2007 HAVANA 342
B. HAVANA 278
Classified By: COM: Michael E. Parmly: For reasons 1.4 b/d
C O N F I D E N T I A L HAVANA 000279
SIPDIS
SIPDIS
DEPT FOR WHA/CCA
E.O. 12958: DECL: 03/25/2018
TAGS: ECON PGOV PINR PREL CU
SUBJECT: CUBA: TOURISM APARTHEID DEALT A BLOW, MAYBE
REF: A. 2007 HAVANA 342
B. HAVANA 278
Classified By: COM: Michael E. Parmly: For reasons 1.4 b/d
1. (C) SUMMARY: The GOC has lifted its ban on Cubans
staying in hotels on the island. The measure will be
economically and politically beneficial for the GOC and to a
small number of Cubans. However, an economic barrier remains
between the average Cuban and a hotel stay. End Summary.
2. (U) Literally overnight, the GOC lifted its ban on Cubans
staying in hotels on the island. In addition, Cubans are now
permitted to rent cars, a service that is usually only
available at hotels. There was no official announcement but
the measure, as confirmed by many hotel and car rental
workers as well as the press, went into effect on Monday,
March 31.
3. (C) Although the measure's execution was carried out
overnight, it had been thoroughly studied by GOC
decisionmakers. As several Cuban economists revealed to
Econoff at a conference in Montreal, Canada on September
2007, the GOC had been amenable to lifting the ban for some
time and had elicited studies on the matter from academics.
4. (C) In 2007 Cuban tourism showed its worst performance in
15 years and, per Reftel A, its problems are systemic and not
easily solved in the short term. By tapping into a small --
but, depending on future GOC policies, potentially growing --
segment of Cubans who have either the purchasing power or
access to remittances, lifting the ban could provide a shot
in the arm to the ailing tourism industry by filling some of
the many vacant rooms.
Comment:
--------------
5. (C) By providing both an incentive and an outlet for
consumption, lifting the ban, along with the other new
concessions, follows the GOC's assertion that "those who
produce more will be rewarded more." Now the only remaining
-- albeit gigantic -- obstacle for Cubans to stay in hotels
is being able to afford it. Politically, by removing the ban
the GOC has essentially taken away the basis for the "tourism
apartheid" characterization. We expect the GOC will exploit
this in its lobbying for international support. However, per
Reftel B, the GOC has already shown a disposition to restrict
access to Cubans it may perceive as threats, such as the
members of the opposition. Economically, the measure
provides another source of hard currency for the GOC and
because so few Cubans can afford a hotel stay, the measure
will cause no undue economic dislocation or income inequality
among the population in the short term.
6. (C) It remains to be seen whether the GOC will attempt to
make hotel stays more affordable for the average Cuban, but
we believe that would be unlikely for the following reasons:
a. It would be yet another form of GOC subsidization, which
the GOC is currently trying to avoid; b. Hotel rooms at a
discount -- but still profitable -- for Cubans would be one
thing, but the discount needed to make it affordable to
Cubans so large that it would be economically unsustainable,
and foreign partners would not go along with it; c. As
opposed to making hotels more affordable, the GOC's declared
intent is to grow the economy so that in the long run more
and more Cubans can afford hotels -- a very long-term plan
indeed.
PARMLY
SIPDIS
SIPDIS
DEPT FOR WHA/CCA
E.O. 12958: DECL: 03/25/2018
TAGS: ECON PGOV PINR PREL CU
SUBJECT: CUBA: TOURISM APARTHEID DEALT A BLOW, MAYBE
REF: A. 2007 HAVANA 342
B. HAVANA 278
Classified By: COM: Michael E. Parmly: For reasons 1.4 b/d
1. (C) SUMMARY: The GOC has lifted its ban on Cubans
staying in hotels on the island. The measure will be
economically and politically beneficial for the GOC and to a
small number of Cubans. However, an economic barrier remains
between the average Cuban and a hotel stay. End Summary.
2. (U) Literally overnight, the GOC lifted its ban on Cubans
staying in hotels on the island. In addition, Cubans are now
permitted to rent cars, a service that is usually only
available at hotels. There was no official announcement but
the measure, as confirmed by many hotel and car rental
workers as well as the press, went into effect on Monday,
March 31.
3. (C) Although the measure's execution was carried out
overnight, it had been thoroughly studied by GOC
decisionmakers. As several Cuban economists revealed to
Econoff at a conference in Montreal, Canada on September
2007, the GOC had been amenable to lifting the ban for some
time and had elicited studies on the matter from academics.
4. (C) In 2007 Cuban tourism showed its worst performance in
15 years and, per Reftel A, its problems are systemic and not
easily solved in the short term. By tapping into a small --
but, depending on future GOC policies, potentially growing --
segment of Cubans who have either the purchasing power or
access to remittances, lifting the ban could provide a shot
in the arm to the ailing tourism industry by filling some of
the many vacant rooms.
Comment:
--------------
5. (C) By providing both an incentive and an outlet for
consumption, lifting the ban, along with the other new
concessions, follows the GOC's assertion that "those who
produce more will be rewarded more." Now the only remaining
-- albeit gigantic -- obstacle for Cubans to stay in hotels
is being able to afford it. Politically, by removing the ban
the GOC has essentially taken away the basis for the "tourism
apartheid" characterization. We expect the GOC will exploit
this in its lobbying for international support. However, per
Reftel B, the GOC has already shown a disposition to restrict
access to Cubans it may perceive as threats, such as the
members of the opposition. Economically, the measure
provides another source of hard currency for the GOC and
because so few Cubans can afford a hotel stay, the measure
will cause no undue economic dislocation or income inequality
among the population in the short term.
6. (C) It remains to be seen whether the GOC will attempt to
make hotel stays more affordable for the average Cuban, but
we believe that would be unlikely for the following reasons:
a. It would be yet another form of GOC subsidization, which
the GOC is currently trying to avoid; b. Hotel rooms at a
discount -- but still profitable -- for Cubans would be one
thing, but the discount needed to make it affordable to
Cubans so large that it would be economically unsustainable,
and foreign partners would not go along with it; c. As
opposed to making hotels more affordable, the GOC's declared
intent is to grow the economy so that in the long run more
and more Cubans can afford hotels -- a very long-term plan
indeed.
PARMLY