Severe Crisis in Cuba Doesn’t Stop Tourism Investment
By Francisco Acevedo
HAVANA TIMES – Life in Cuba is becoming more complicated, but according to the most recent data from the National Office of Statistics and Information (ONEI), of the investment made in Cuba from January and September 2024, 10.4% of the national budget was allocated to hotels and restaurants, higher than the 7.2% in 2023 during the same period.
It also doesn’t seem to matter much that Cuba ended 2024 with fewer foreign visitors; in this battle to earn dollars, no resources are spared, even though tourist facilities are almost always below their occupancy capacity.
The 2.2 million international visitors received in 2024 represented the worst figure since 2007, and 10% fewer than the 2023 numbers, which were already low due to the impact of the COVID-19 pandemic, although the rest of the world had fully recovered by 2024.
Of the main countries sending tourists to Cuba, only Mexico and Russia showed modest increases, with Canada still being the leading source of visitors, despite a decrease compared to previous years.
The shortage of dining options, the uneven relationship between quality and price, the energy crisis, the lack of fuel, and the US economic sanctions against Cuba were other key factors that weakened the performance of the tourist industry one of the dictatorship’s main sources of hard currency.
Cuba’s recent return to the US list of State Sponsors of Terrorism, decreed by Donald Trump as soon as he set foot in the White House, affects European Union citizens and others like Japan, as they lose the privilege of the tourism visa exemption to the United States through the ESTA program if they set foot in Cuban territory.
According to the official report released by the island’s authorities in their annual report on the impacts of the embargo, over $5 billion were lost between March 2023 and February 2024.
After six years of construction, earlier this month, the five-star Iberostar Selection La Habana Hotel was inaugurated, with 42 floors and 565 rooms, making it the tallest building in Cuba, although it is not noticeable because several floors are below street level.
The Almest Real Estate Company, part of the Ministry of the Revolutionary Armed Forces (Minfar), was in charge of the project, which, according to specialists, cost around $60 million, although this has not been officially made public.
Popularly known as the K Tower, due to the street where it is located, it is the most modern in the capital, although its potential profitability remains to be seen, while nearby establishments such as the Habana Libre and the Hotel Nacional continue to operate with low occupancy levels.
Everything seems to be heading towards a reconversion to luxury tourism, taking into account the recent five-star and even higher category hotels that have been inaugurated in recent years.
For 2025, it was also reported that 2.8% of the investment budget will be allocated to restore rooms in 25 hotels, while 5.1% will go to 19 hotels of the Gaviota tourism company, also under military control.
In this context, the resumption of US sanctions complicates the possibility of alleviating Cuba’s profound economic and social crisis.
The closure last week of Western Union transfers is another step in this policy aimed at preventing the strengthening of state funds.
The company announced that users with pending payments will receive a refund, although no details have been provided about future options or plans to resume service to the island.
The decision had been expected after Orbit SA was added to the US Department of State’s Restricted Entities List, as that was the channel used to facilitate operations.
In this way, Western Union will close a brief chapter of only nine months since it resumed its money transfer service to Cuba in May of the previous year, after halting it in 2020 during Trump’s first administration.
Although the service was restored two years later with limitations, it was once again cut due to “technical problems,” according to the official statement.
As this has become a recurring situation, Cuban families have turned to alternative routes, such as indirect channels from Europe and other places, through around 150 informal banks or sending currency through travelers. However, this last option is also expected to decline in the near future due to measures from the new US administration.
Families, especially in the United States, had recently boycotted the “official” channels (like via Orbit) because they know that Cuban authorities disguise their presence through third parties to control those funds as they please, without considering the population’s main priorities, such as tourism.
While the embargo serves as a perfect excuse for corruption, bureaucracy, and enrichment oat the top, the strategy for the budget’s destination—especially in tourism—is questionable, while national industries continue to require more investment to modernize, increase production and services, and ultimately lower food prices, which is what most affects the Cuban population.
For the moment, all initiatives like digitalizing payment mechanisms, Monetary Reform, or the Single Investment Window continue to fail, and it remains to be seen whether partial Dollarization will resolve anything, as it is still just beginning, and it will take time to have a clear opinion on this matter.
Clearly the collective regime (government and military) don’t care about their own people. While the citizens wait for hours in lines for food, fuel, medicines, and money – and often are left stranded when supplies run out – there’s the government with their military complex, made up of multiple companies, either skimming money off the top of remittances or building supposed “luxury” hotels for no one to patronize. All this while the country sinks into the abyss as a hellhole.
Nothing will change. Sanctions against the country has only shown to enrich the elites. While they funnel everything away from the citizens into their own pockets, they use the sanctions as an excuse as to why everything is hard for the citizens. Sanctions then need to be specifically targeted at the elite government and military cadres. Make them feel some pain for once.
Socialism doesn’t work in practice. There have been around 40 countries that have flirted with socialism and they all failed. Communism is much the same. All other communist countries like China, Russia, and Vietnam have adopted capitalism – and pulled themselves out of the doldrums of despair. China specifically mentions the need to allow corporations to become wealthy first and then they will be forced to help the poor.
While Cuba languishes in it’s antiquated hardline ideology, which almost everyone has abandoned, other nations have seen the light and have risen to such amazing heights. Mexico’s Cancun is one direct comparison made in the article, but then there’s the meteoric rise of Singapore, South Korea, Hong Kong, Taiwan, but also Vietnam, and even some African countries outperform Cuba by leaps and bounds.
Cuba is a failed experiment – Castro fooled them all. And they have been stuck in the past ever since.
Cuba is done for tourists, taxi drivers are often overcharging tourists. I can rent a car in many countries for $25 to $30 US per day and fuel for $1 per liter but in Cuba it is much more expensive. Water is not safe to drink, Police do nothing, blackouts. Cuba is done.