Cuba Will Punish Businesses That Reject the Russian MIR Card

President Diaz-Canel proposes a direct flight between St. Petersburg and Havana to relaunch Russian tourism.

By 14ymedio

HAVANA TIMES – Miguel Diaz-Canel’s trip to Russia to attend the celebrations of the 80th anniversary of the Soviet Army’s victory over Nazi Germany, to be commemorated on May 9, is dominating the official Cuban press, though no concrete outcomes from the visit have been reported. The event is proving to be more institutional and propagandistic than the Cuban government likely hoped, which yesterday made an announcement that wasn’t really one at all.

The Cuban president met with the governor of Saint Petersburg, Alexandr Beglov, at the Smolny Palace—the Bolshevik headquarters during the October Revolution—and discussed with him the possibility of establishing direct flights between that city and Havana. That is, for now, the non-news item that international news agencies have picked up, citing Díaz-Canel’s comments to Tass. The president said they are working to increase the number of tourists traveling from Russia’s second-largest city to the Island and are considering options for that route to Havana.

Whether this connection will materialize remains to be seen. Airlines will have to decide whether the route is worthwhile, at a time when Russian tourism to the Island is in decline. In the first quarter of the year, the number of travelers from Russia dropped by 50%, with only 33,395 visitors compared to 66,879 in the same period last year.

Diaz-Canel’s announcement prompted the Russian press to resurface information that Cuban Minister of Tourism Juan Carlos García had shared the previous week at the International Tourism Fair (FitCuba), which had not previously been publicized. In the midst of a fervent yet unsuccessful attempt to attract Russian tourists, the Cuban government approved the use of MIR cards on the Island at the beginning of 2023 and committed to accelerating their implementation—for both payments and cash withdrawals in rubles from ATMs—to facilitate travel for Russians.

Apparently dissatisfied with the progress, authorities had previously discussed broader expansion plans, but they now announce a “complete” rollout and warn of consequences for resisting the process.

“We have issued clear recommendations for the tourism sector: everyone must accept MIR cards, regardless of technical preferences. We are preparing the second phase: if a business refuses to comply with this requirement, its operations may be restricted,” Garcia told Ria Novosti.

The minister stated that more than 20,000 hotels and retail businesses already accept the Russian card, but coverage must be universal. Although further details are lacking, his statements suggest that private businesses or self-employed entrepreneurs could lose their licenses if they do not accept this payment system, which does not seem to be a sufficient incentive to boost tourism from Russia.

In 2024, the Cuban government had projected it could attract 200,000 Russian visitors to the Island, based on promising data from 2023, influenced by Western sanctions against Russia due to its invasion of Ukraine.

However, only 185,816 Russians ended up arriving—even though Russia was one of the best-performing source markets, growing by 0.5% compared to sharp declines in nearly all others (only Mexico, with a 0.8% increase in travelers, surpassed Russia). The tourism minister then said the 200,000 forecast would have to wait until 2025 and announced business deals that have yet to materialize.

“I believe we’re very close to seeing the first hotels built by Russian entrepreneurs in Cuba. Additionally, several existing hotels could be transferred to Russian travel companies for management,” he said. Nothing more has been heard since.

It’s not a good time to invest in the tourism sector, despite Prime Minister Manuel Marrero’s announcement of new measures to shift tourism policy during FitCuba, including incentives for China—the market Cuba is now targeting. Less than a month ago, Spain’s EFE news agency revealed that the government is preventing foreign companies from repatriating the foreign currency in their bank accounts.

According to its sources, the plan is to allow them to open new “unlimited” accounts that will have monetary backing. However, these accounts will only accept new capital, as the agency reports that funds in previous accounts cannot be transferred, only transfers from abroad will be allowed. While some entrepreneurs have expressed frustration about being unable to access their own money, others noted that this situation had been ongoing for some time and hope the new accounts will enable international operations or profit repatriation.

Among those who remain steadfastly loyal, come what may, is Miquel Fluxa, president of the Spanish  hotel group Iberostar, who took the opportunity during FitCuba last week to express his confidence in the Island’s tourism recovery.

“We believe things can improve in Cuba,” said the businessman. Fluxà noted that his company is betting on urban tourism development, as evidenced by their management of the hotel located in Havana’s controversial K Tower, which opened in late February and has received very few guests.

“I’ve come here for over 30 years with love, seeking nothing in return, and I’ve felt deeply respected and loved by Cubans, which has driven me to develop all the business ventures we’re undertaking here. We try to do things with the best intentions and highest quality,” said Fluxa, leaving behind a heartfelt declaration for his staff on the Island.

“I’m very satisfied and proud because we have a team of people who love the company. The important thing is not to do things out of obligation, but out of devotion, and we truly have a team of people who love the company. Given the circumstances, we try to make them happy and do everything we can to educate, train, and provide them with opportunities. People are human, they are good, and it’s really hard not to love Cuba,” he concluded.

First published in Spanish by 14ymedio and translated and posted in English by Havana Times.

Read more from Cuba here in Havana Times.