• by Gary Leopold , Columnist, January 5, 2015

When President Obama recently announced steps to significantly thaw the relationship between the United States and Cuba, it served as the latest and loudest wake-up call that tourism in the Caribbean region could soon be having a dramatic shift.

While it’s always been felt that the U.S. embargo would someday be lifted and borders reopened, the announcement seemed to catch the Caribbean and travel community by surprise. And while there are significant legislative hurdles to overcome before U.S. citizens can travel as freely as they do in other Caribbean islands, that day is more clearly in sight. While the actual timeline might take years rather than months to complete, anyone involved in marketing the Caribbean would be wise to immediately embrace the inevitability and ensure that their marketing and product plans and activities are fully accounting for Cuba’s eventual impact on the U.S. market.

Of course, doing battle with Cuba for tourists isn’t new for Caribbean marketers. Over 1 million Canadians already come to Cuba each year, pumping over $740 million into the country’s economy and a significant number of travelers from the UK, Spain and other markets are also regularly visiting the island. Anyone who looks to these countries as source markets has already been dealing with Cuba as a worthy, if somewhat hamstrung, competitor.

What will be dramatically different in the coming scenario is that the United States represents more than half of all the business traveling to the Caribbean, and anything that alters that current balance and distribution will impact every destination in the region.

While no one can fully predict the future, the International Monetary Fund sponsored a study in 2008 to analyze how a shift in U.S. policy would impact the region. Saying that “an industrywide shock like this happens once in 100 years,” the study was less about doom and gloom, but rather the need to find “a new equilibrium” within the region. The good news is that they believe the entire region might see a 2% to 11% increase in visitors, with 3 to 3.5 million U.S. travelers finding their way to Cuba annually. The study also predicted that the surge of U.S. travelers going to Cuba would quickly bring the island to capacity and force more non-U.S. travelers to seek out other destinations within the Caribbean. 

As U.S. travelers pour in to Cuba, prices will surely increase, and that will push price-sensitive non-U.S. business to seek out alternative destinations to replace the once affordable Cuban vacation. For Caribbean countries that currently rely most heavily on U.S. business, the loss of U.S. travelers to Cuba could be significant and they should be looking to ramp up their marketing efforts now to make inroads to bring Canadians and other non-U.S. travelers into their market. This will require developing products, experiences and marketing activities that can speak to the desires of these audiences and finding ways to make their islands increasingly attractive to an audience previously focused on Cuba and other destinations where they already felt most welcomed and comfortable (surrounded by fellow countrymen). 

Regardless of whatever steps its competitors take, the biggest challenge in marketing against Cuba is ultimately the strength of the Cuban product itself and the reality that it will get much stronger and more alluring as U.S. dollars and private-sector investments eventually pour into the destination, creating new hotel products, enhanced experiences and improved infrastructure. 

Cuba is the largest island in the Caribbean encompassing over 44,000 square miles with nearly 22% of the country reserved as protected land. It has over 3,500 miles of coastline, six UNESCO Biosphere Reserves, nine UNESCO World Heritage Sites and the region’s second-largest reef, which it has managed to protect and preserve better than anyone in the Caribbean. 

Located a scant 90 miles from the United States, Cuba becomes an easier, less time-consuming, and most likely a more affordable destination to travel to (by air and sea). Throw in its rich history, old-world architecture, distinct culture, music and culinary flavors, low crime rate and more, and you have a destination that not only appeals to today’s travelers’ desire for new and distinct experiences, but it has the size, scale and diversity to keep appealing to those same customers over and over. Cuba isn’t likely to be a one-and-done destination like some of the other islands, and if they can enhance service and other aspects of the experience, it promises to have a very high repeat factor. 

Not surprisingly, most of the government and tourism leaders across the Caribbean are publicly trying to put a positive spin on the situation, focusing less on the likelihood of shifts in market share and audience mix, and instead drawing attention to the benefit of increased awareness for the Caribbean overall, and even the possibilities of multi-island itineraries in partnership with Cuba.

Whatever your make of the situation, the wise bet is to start anticipating and preparing now for the eventual impact on the U.S. market.

A warning flare has lit the Caribbean sky. 

People, get ready. A change is coming.