ECONOMY-CUBA: In Pursuit of European Tourists

By Dalia Acosta Reprint | | Print |

Dalia Acosta

HAVANA, Apr 5 2002 (IPS) - The Cuban government has authorised the circulation of the euro in the country’s main tourist town, as it did long ago for the dollar, to attract European visitors in a bid to overcome the tourism industry crisis that began in the wake of the Sep 11 attacks in the United States.

The euro, the currency of the European Union (EU) that since Jan 1 is used in 12 of the bloc’s 15 countries, may be used to pay for goods and services in the beach city of Varadero, 140 km from Havana.

This currency experiment in Varadero will begin in June and, if all goes well, ” will be extended to the rest of the island’s tourist areas,” said Cuba’s Vice-President Carlos Lage during an international tourism conference held in Germany last month.

Ibrahim Ferradaz, the Cuban Tourism minister, had promised just days before the Sep 11 attacks that Cuba would this year market tourist packages in euros to the EU countries that send a significant number of tourists to this socialist-run island.

Incentives aimed at attracting European tourists have been launched in addition to the advertising campaign that Cuba has under way, touting the security that the Caribbean island offers visitors.

The widespread fear of flying caused by the hijacking of commercial flights in the attacks against the World Trade Centre in New York and the Pentagon (U.S. Defence Department) in Washington had an immediate impact on the airline industry, and consequently, on tourism worldwide.

Figures from the World Tourism Organisation indicate that international tourist arrivals fell from 697 million in 2000 to 688 million last year, with a sharp reduction during the final months. This was the first major decline recorded since World War II.

A report issued by the organisation last month attributed the reduced tourist numbers to the terror attacks and to the cooling of the global economy that began in late 2000.

However, the reactivation of the tourism industry has already begun, and is expected to reach its pre-crisis levels in this year’s third or fourth quarter, said Francesco Frangialli, secretary-general of the World Tourism Organisation.

The chair of the organisation’s special committee on reactivation, Mamdouh El Beltagui, commented that the crisis demonstrated how vulnerable the tourism industry is, and also “how quickly consumers change their habits.”

El Beltagui cited the example that, in November, the number of passengers on domestic flights in France dropped 15 percent, while the number of train passengers grew nine percent.

Europeans chose rail and highways to travel shorter distances, which benefited the emerging markets like Bulgaria, Estonia and Slovakia, which saw tourism expand an average of 10 percent last year.

These new habits had a profound effect on Cuba, because it is an island and can only be reached by plane or boat.

At mid-2001, Germany, Spain, France, Britain and Italy – alongside Canada, Mexico and Argentina – were the countries that had most tourists heading to Cuba. The European visitors represented 56 percent of the tourist arrivals on the island.

Vice-President Lage said that over the last few years, Cuba’s exchange with the EU has multiplied three-fold. He pointed out that the number of European tourists travelling to the island grew 600 percent and the commitments for capital investment multiplied by 50.

The significant decline in arrivals from Germany, Spain and Italy was largely responsible for the stagnation of the Cuban tourism industry, which ended the year 2001 with just 0.3 percent growth over that of 2000.

The reduced tourism in the last months of the year hurt Cuba’s small private sector, which relies on the dollars that foreign visitors pay for services like taxis, restaurants, and room rentals.

“The situation has improved, but it isn’t like it was before Sep 11. There are fewer tourists, and those that do come spend less,” said María Elena Peñate, owner of a restaurant in Miramar, a residential area of Havana.

Official sources state that some 8,000 tourism industry workers have already recovered their jobs after being sent home for vacation or to training courses. However, another 2,000 former employees in the sector remain without work.

Rodolfo Jiménez Polanco, secretary of the tourism workers’ union, stated recently that in the first 75 days of this year, Cuban tourism was 12 percent below that of the same period in 2001.

Nevertheless, at the end of last year, Cuba held a privileged place in the Caribbean context, maintaining the annual volume of nearly 1.8 million tourists.

In the neighbouring Dominican Republic, the decline in 2001 was 6.7 percent with respect to the previous year, with 165,000 fewer visitors, according to sources from that country’s National Association of Hotels and Restaurants.

The impact was even greater for the smaller Caribbean islands, whose economies are highly dependent on tourism and do not have much more to attract visitors than sun and sand.

According to authorities in Havana, Cuba’s strong points for building the sector and for competing on the European market are its beaches, but also its historic and cultural attractions, eco- tourism and health services.

Cuba began to promote tourism heavily in 1990, and six years later made it onto the list of Caribbean island nations that receive more than one million visitors a year: Puerto Rico, Dominican Republic, Bahamas and Jamaica.

Gross income from tourism had multiplied eight-fold in 2000. The participation of the “hospitality industry” in the balance of payments increased from 4.1 to 43 percent in a decade, replacing sugar as the country’s principal source of income.