Photo Credit: Photo illustration by Thomas R. Lechleiter

Focus on Cruise:¡Cuba abierta!

April 12, 2017

Cuba's gradual opening to cruise tourism is generating industry excitement about the Caribbean as a whole, redounding to the benefit of both cruise lines and Cuban destinations. Yet, the early fantasy of Havana becoming a busy, popular cruise port again is yielding to more practical realities.

Real-world limitations mean that Cuba has some ways to go before its impact on cruising at large is widely felt. Chief among them is the infrastructure needed to dock and unload large, modern cruise ships.

"As long as it's just a pier-and-a-half in Havana, it isn't going to be too significant," Carnival Corp. chairman Micky Arison said.

Still, the measured arrival in Cuba of cruise ships from the U.S. is already changing some things. Competing ports in the Caribbean are sprucing up, some aging vessels have gained a new lease on life, one U.S. port has cause to celebrate and travel agents have an intriguing new product to sell.

What's more, most analysts assume that of all parts of the travel industry, the cruise sector stands to get the most benefit from Cuba's revival.

Richard Fain, chairman of Royal Caribbean Cruises Ltd., agreed with that assessment. "Nobody's talking about 'Oh, this is great for the hotel industry,'" he said. "Nobody's talking about [how] this is great for the airline industry. But cruising offers an opportunity to visit ports of call, places that otherwise would be a little difficult to visit. So even though Cuba today is an insignificant part of any of our businesses, I think it says something."

In fact, U.S. hoteliers have made a bit of headway in developing new properties in Cuba. But that development has been slow, and the island, including its capital, Havana, offers few quality hotels at affordable prices. That fact, too, is pushing people to travel by cruise to Cuba, since the vessel in which they arrive also serves as their hotel for their visit.

According to a recent Miami Herald estimate, approvals are in place to take about 172,000 U.S. cruise passengers to Cuba this year. That's a fraction of the 25.3 million people expected to take a cruise worldwide.

It also looks small compared with Cuba's neighbors in the Caribbean. Jamaica hosted 1.66 million cruise passengers in 2016, according to tourism minister Edmund Bartlett, while the Bahamas drew more than 4.2 million.

But Cuba's central location in the Caribbean is hard to overlook. Ten times the size of the Bahamas or Jamaica and more than 775 miles long, it sits astride every potential route in the eastern, western and northern Caribbean -- a fact that could spell trouble for Cuba's neighbors, especially if they haven't improved their cruise facilities lately.

But that doesn't appear to be the case. If Caribbean ports once took their cruise traffic for granted, they don't anymore, said Beverly Nicholson-Doty, tourism commissioner of the U.S. Virgin Islands.


Caribbean cruise port competition

"Certainly having another cruise destination in the region puts all of us on notice in terms of making sure we do the investments that we have to in our product," Nicholson-Doty said in an interview at the Seatrade Cruise Global convention in March.

"If you look at the Virgin Islands in particular, we're a mature destination," she said. "A lot of people have been to St. Thomas. Some individuals oftentimes are repeat visitors. So we have to be conscious of how do we make sure every time someone comes to the U.S.V.I., what can we give them that's new?" 

Nicholson-Doty said one improvement in the works is a water transportation link between three of the key tourist areas in St. Thomas, which will enable visitors to see all three in one day.

The administration is also working on infrastructure improvements in several towns, Nicholson-Doty said, and it is reopening the colonial fort in St. Thomas, the territory's oldest building, which has been closed for repairs since 2007.

Another nearby destination, Jamaica, is also making improvements. It has targeted the port at Ocho Rios for expansion, Bartlett said, and it will seek to revive cruising in Kingston, a cargo port that was once a hub for cruise ships.

"The truth is that in the early years, in the 1940s and 1950s, the itinerary was Havana-Kingston," Bartlett said. "That is where the center of cruise was."

Oceania Cruises’ 1,250-passenger Marina makes its first approach to the Havana cruise terminal in March.
Oceania Cruises’ 1,250-passenger Marina makes its first approach to the Havana cruise terminal in March.

But, he said, when Carnival Cruise Line picked Montego Bay as a port of call for its first ship, the Mardi Gras, it shifted the focus to western Caribbean itineraries.

Bartlett said Cuba and Jamaica have a cooperative tourism agreement that should enable Jamaica to benefit, rather than suffer, from growth in Cuba's cruise business.

"Cuba is going to offer a new opportunity for a reconfigured northern Caribbean, and from that will emerge a number of new itineraries," Bartlett predicted. "And Jamaica is at the center of that."

Perhaps no destination has more to lose from a resurgence in calls to Cuba than the Bahamas, which at its closest point is only 13 miles from Cuba. Nassau and Freeport have already lost a combined 25 calls from the Norwegian Sky when Norwegian Cruise Line changed its itinerary to provide 33 weekly cruises to Havana starting in May and running through 2018 on the Sky.

Erica Ingraham, senior director of cruise and maritime development for the Bahamas, said the destination is taking the loss in stride.

"We're not necessarily concerned about Cuba opening," Ingraham said. "There's enough business to go around for the entire region. We applaud their efforts."

But in addition to applauding a new rival, the Bahamas has been working hard to nail down and expand its own cruise business. It recently signed an agreement with Royal Caribbean Cruises Ltd. (RCCL) that grants the company the right to build a pier at its Bahamian day stop at Coco Cay but also commits RCCL to an accelerated hiring of Bahamians on its ships as well as a new hospitality training program.

In addition, the Bahamas is helping to develop a private island for MSC Cruises near Bimini and to redevelop Norwegian's private island at Great Stirrup Cay. It is also in advanced talks for Carnival Cruise Line to build a beach destination on Grand Bahama.

"These have been in negotiation for a long time," Ingraham said. Together, they will ensure that the big Florida-based cruise lines have a vested interest in ongoing calls to the Bahamas, she said.

Roger Blum, principal at Cruise & Port Advisors, a Miami consulting firm, said Cuba's opening to U.S.-based passenger ships represents more benefit than harm to other Caribbean destinations. 

"The way that most of the itineraries have developed, Cuba will be part of an itinerary," Blum said. "There's not a lot [of cruise lines] that are doing only Cuba."

For example, Royal Caribbean International offers five-day itineraries from Tampa that stop at Cozumel and Key West in addition to stopping at Havana.

Adequate port facilities lacking

Frank Del Rio, founder of Oceania and CEO of parent company Norwegian Cruise Line Holdings Ltd., speaks with the media in Havana after the Marina’s arrival.
Frank Del Rio, founder of Oceania and CEO of parent company Norwegian Cruise Line Holdings Ltd., speaks with the media in Havana after the Marina’s arrival.

Even if they wanted to, cruise lines couldn't shift massive amounts of business to Havana because of infrastructure constraints. The pier in Havana can accommodate only one midsize and one smaller ship, while a tunnel under the harbor limits the draft of ships coming into Havana Bay.

"So, at least today, Cuba will be a wrinkle in itineraries," Blum said. "It won't be a major game changer."

In the meantime, the opening of Cuba to U.S. cruises has had a couple of surprising side effects.

One was the unexpected choice of Tampa as a gateway for cruises that include Havana. Both Royal's Empress of the Seas and Carnival Cruise Line's Carnival Paradise are departing to Cuba from Tampa, leaving Florida's west coast city serving as many Havana-bound cruise passengers as Miami.

Greg Lovelace, director of marketing and business development for Port Tampa Bay, said the port is more of a drive market than Miami and offers ships a straight, short route south to Havana.

"Our sweet spot in Tampa is the western Caribbean," he said. "Whenever there's a new destination -- which doesn't happen very often -- plopped into your sweet spot, obviously that's a benefit for us."

Tampa also offers a tie to Cuba in its Ybor City neighborhood, which has been a cigar-making center since the turn of the century and is home to the well-known Arturo Fuente brand.

"Whether you're buying cigars there or just seeing the Cuban influence in Ybor City, then you hop on a ship and the next thing you know you're seeing the real Cuba," Lovelace said.

The restored colonial buildings in Old Havana.
The restored colonial buildings in Old Havana. Photo Credit: Robert Silk

With the Empress homeporting in Tampa all summer, Lovelace said, in 2017 the port expects to surpass 1 million passenger movements for the first time.

"We've always talked about extending the season, so to have this summer program is very exciting," he said.

Another unintended consequence of the Cuba opening is to prolong the service life of older ships that might otherwise be in jeopardy of being retired. The Sky is close to 20 years old, while the Empress is approaching 30.

Blum said, "You take a vessel like the Empress of the Seas, which left the Royal Caribbean fleet quite a while ago. I would imagine that if it wasn't for the ship fitting so beautifully in Cuba, the likelihood is that it wouldn't be back in the Royal Caribbean fleet."

The older ships aren't being picked for their age so much as their size, said RCCL's Fain, adding, "The issue with Cuba is that it can only handle the smaller ships, and the older ships tend to be smaller."

At 2,004 passengers, the Sky is the second-smallest vessel in Norwegian's fleet, while the Empress, at a current capacity of about 1,840 passengers, is the smallest Royal Caribbean vessel available.

Small, luxe ships

The small-is-beautiful formula also works for luxury ships, Blum pointed out. The 1,250-passenger Marina and the 684-passenger Insignia and Sirena, operated by Oceania Cruises, and the 700-passenger Seven Seas Mariner are among the high-end ships offering cruises to Cuba.

Another way to see the Caribbean's newest available destination is on the Pearl Mist, a 200-passenger coastal cruiser run by Pearl Seas Cruises.

"So far it's been great," said Charles Robertson, chairman and CEO of Pearl Seas, which has completed about half of its spring schedule of 10-day Cuba cruises that sail roundtrip from Port Everglades.

Robertson said passenger demand has been strong for the cruises, which visit a half-dozen destinations beyond Havana.

"Operationally, it's been very easy," he said. "It took a lot of patience to get through all the government stuff."

In addition, Cuba cruising offers an alternative in the winter months to going on Panama Canal cruises, Robertson said.

"It certainly is a growth area," he said.

People-to-people cuts both ways

U.S. travelers to Cuba are exposed to a variant of tourism not found in most destinations. Because of the rules set by the U.S. government to limit most tourism to certain people-to-people activities, Cuban port calls are rich with cultural and historical tours, as well as other chances for Americans and Cubans to exchange views.

One tour company, InsightCuba, recently announced that its Masala Expeditions subsidiary will be offering six small-ship cruises this year to Europe and Africa destinations using the Cuba people-to-people exchanges as a model.

"For 17 years, we've seen how this type of travel moves people," said InsightCuba president Tom Popper. "They never look at travel the same way again."

But others see the people-to-people model as more of an impediment than a prototype.

"Most people don't understand it," Arison said, citing it as another obstacle that limits potential cruise growth in Cuba.

Carnival Corp. has been operating its Fathom brand in Cuba for nearly a year, and Arison said consumer preference is driving cruise lines to make Havana the centerpiece of their itineraries.

"There are 10 or 11 ports in Cuba, but everyone wants to go to Havana," he said.

For U.S. travel agents, Cuba is virgin territory, a rare opportunity, but one that comes with complications.

Frank Del Rio, the Cuba-born founder of Oceania and CEO of parent company Norwegian Cruise Line Holdings Ltd., on the Marina's bridge.
Frank Del Rio, the Cuba-born founder of Oceania and CEO of parent company Norwegian Cruise Line Holdings Ltd., on the Marina's bridge.

Carnival Cruise Line president Christine Duffy said, "The part we don't talk very much about is for Americans who take ... a cruise that includes Cuba, there's a lot more involved. 

"That means there's a lot more involved for the travel agent. We have guests who don't have passports; you've got to have a passport."

Some guests might be waiting to get a passport until they are sure the Obama administration's opening to Cuba won't be closed by President Trump.

"Let's hope [Trump] revisits it in a positive way," Norwegian Cruise Line Holdings CEO Frank Del Rio said during a panel discussion at the Seatrade convention.

Del Rio, himself a Cuban immigrant, said, "I'm all for lifting the [U.S. trade] embargo. It's been a failure for 57-odd years, and after 57 years of failing, you'd think someone wants to try something new."

Del Rio said the slow opening of Cuba could be the passageway to a wider sea.

"It's a major market that could develop over time," he said.

"It has some infrastructure limitations today, but certainly Cuba could be a major force in the cruise business for years to come, and I hope the administration sees that potential."

Trump and his administration, Del Rio said, "are business-oriented and therefore would hesitate to roll back any of the Obama-era changes."