Travel industry eyes Cuba

| 22/12/2014 | 0 Comments

(CNS Business): Share prices in the major cruise lines rose following President Barack Obama’s announcement last week that the US plans to re-establish diplomatic ties with Cuba. A ban on commercial tourism from the States remains in effect, with only certain travelers from the United States permitted into Cuba, but the industry giants are eyeing the possible next step in the thawing of relationship between the two countries.

“All three of the cruise lines under our coverage (Royal, Carnival, Norwegian) have a considerable amount of capacity operating in the Caribbean, and we believe an opening of Cuba could generate material incremental demand, both from repeat cruise customers and those new to the industry,” Stifel analyst Steven Wieczynski wrote in a note to clients.

Carnival Corp, the world’s largest cruise operator, said Cuba would present “a tremendous opportunity” if the US lifted its economic embargo. “We are excited about the prospect for Cuba,” Carnival CEO Arnold Donald said. “There’s a lot of pent-up demand to visit Cuba.”

Carnival executive Roger Frizzell said, “Cuba is the largest country in the Caribbean, so there’s some exciting possibilities from a cruise industry perspective. Some infrastructure for cruising already exists in the country, along with several ports, so it offers great potential.” But he added that “there are other issues that will need to be taken into consideration if this market opens up”.

The market responded by sending Royal Caribbean up 6.6 per cent to $81.84 per share, Norwegian Cruise Line up 4.6 per cent to $45. 76, and Carnival up 3.5 per cent to $44.61 following Obama’s announcement.

US airlines have also been eyeing Cuba’ potential, with several already offering charter flights for Americans with approved for travel to the island nation­ under current regulations. JetBlue started flying Cuba charters in September 2011 for those allowed to travel there.

“We look forward to the day, hopefully soon, when all Americans have the opportunity to travel to Cuba,” said Barney Harford, CEO of the travel-booking site Orbitz. “There are numerous economic, social and cultural benefits that will flow from free and open access and our customers are eager to visit Cuba.”

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Category: Cruise Tourism, Stay-over tourism, Tourism

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