VOXXI: Improving U.S.-Cuba relations: Bad for the Dominican Republic’s tourism industry?

"Improving U.S.-Cuba Relations: Bad for the Dominican Republic's Tourism Industry"
W. Alejandro Sanchez
VOXXI
December 19, 2014
Originally published: http://voxxi.com/2014/12/us-cuba-dominican-republics-tourism/

The world continues to analyze and ponder the future of U.S.-Cuba relations following President Obama’s landmark decision to seek the normalization of relations with the Caribbean state. However, there is another factor to keep in mind: how will improved U.S.-Cuba relations and the now realistic possibility that the embargo will be lifted in the near future affect the Caribbean and, in particular, the Dominican Republic?

By focusing on the present and futures status of Caribbean tourism, one could argue that a Washington-Havana rapprochement may not be beneficial for everyone.

Bad for tourism?

The State Department has published a fact sheet of the key points of President Obama’s December 17 speech. One section discusses an expansion of travel to the island, stating that U.S. travelers will now be able to go to Cuba for family visits; journalistic activities; professional research and professional meetings; educational activities; public performances, clinics, workshops, athletic and other competitions; and exhibitions, among others.

To phrase this another way, there are now more options that U.S. citizens can use to travel to Cuba. Simply travelling to the island for tourist purposes is still an issue, but we can expect to see more U.S. colleges open study-abroad programs in the island (for the record, several universities already have them, including American University).

The issue here is that Americans will now want to take their dollars to spend in exotic Cuba, instead of visiting other Caribbean states. After President Obama gave his speech, the news website Dominicantoday.com posted a short story which argued that the changes between Washington and Havana “will likely affect Dominican Republic in sensitive economic areas such as tourism, as local industry leaders have for years cautioned that a Washington-Havana thaw would surely siphon off the number of visitors to the Caribbean’s biggest economy.”

The aforementioned article does not mention which “local industry leaders” have warned about this possibility, but this issue does deserve greater discussion.

Facts and the future

The Dominican Republic and Cuba were the two major beneficiaries of tourism in the Caribbean throughout most of 2014. According to a December report by the Caribbean Tourism Organization, some 4.2 million tourists traveled to the Dominican Republic between January and October, while Cuba received 2.2 million between January and September. Jamaica comes at a slightly distant third place with 1.7 million.

These numbers make Cuba and the DR adversaries, as they are the two major destinations for tourists (i.e. Americans, Canadians or Europeans). Nevertheless, a 2005 study on Caribbean tourism muses that when the status quo changes between the U.S. and Cuba it is feasible to foresee a dramatic change in the U.S. market which “will change the rules of the game of Caribbean tourism.”

Given President Obama’s recent speech, it does seem like the rules of the game are about to change. The Dominican Republic’s newspaper Diario Libreexplains how companies like the cruise line Carnival Corp., the discount airline JetBlue and even Orbitz are now ready for the embargo to be fully lifted in order to begin offering deals for American tourists to travel to Cuba. What this means regarding revenue loss for the Dominican Republic remains to be seen.

It is worth highlighting that it is not just the possibility of Cuba opening for business that may threaten tourism to the DR in the near future. Other Caribbean states are also receiving more visitors; case in point is Haiti, which received over 362 thousand tourists in the first nine months of 2014 – this is a 21% increase from the same period in 2013. Likewise, Venezuela is turning to its Caribbean beaches in order to jumpstart its flagging economy. Hence, while Cuba is the DR’s major tourism adversary, we should not forget other nations that are also promoting tourism to enrich their coffers.

As a final point, it is important to remember that if American tourists choose to visit Cuba instead of the DR (whenever the embargo is lifted) this will not be solely because of the chance to visit an exotic location like Cuba, which has been closed to Americans for decades – although this is an obvious reason. If tourism to the DR were to decrease, it would be also because of internal issues that the DR government has yet to fix, such as citizen insecurity.

As we continue to discuss the future of U.S.-Cuba relations after December 17, it is similarly important to keep in mind what this rapprochement will mean for the Caribbean region. The effect of closer U.S.-Cuba relations on tourism to the Dominican Republic may not have an obvious connection at first sight, but if the embargo is lifted and Americans do begin pouring into Cuba, the coffers of the various Caribbean states that depend on tourism revenue, including the DR, will take a big hit.