13 January 2025
Cuba’s Minister of Tourism, Juan Carlos García, has said that it “is essential for the recovery of the sector” that in 2025 the country has ”a decent tourism product that stimulates demand.”
His comments to a meeting of the National Assembly’s Commission on Services followed his admission that the sector would close 2024 with 2.2mn visitors, a projected 9.5% decrease on 2023 when the island received 2.4mn tourists. The forecast outcome was the first overall fall in annual arrivals numbers since the end of the COVID pandemic.
Cuba’s National Office of Statistics and Information (ONEI) is expected to publish shortly the detailed annual tourism arrivals figures for 2024. However, its report for the first eleven months of 2024 indicated a 7.9% like-for-like decrease compared to the previous year, with the island receiving 2,005,390 international visitors by air and cruise ship to the end of November. Its figures indicate that for nine of eleven consecutive months, arrivals numbers fell when compared to 2023, suggesting a continuing downward trend.
In his reported remarks to legislators, García said that while the original goal was to receive 4.3mn visitors in 2024 based on the frequency of international flights to Cuba, a decrease in airlift this winter season meant that achieving tourism’s original arrivals target was not possible.
The problem is expected to continue in 2025. As reported under Europe below, several European airlines have announced they are in the process of reducing or ending services to Cuba. In addition, a key tour operator, Canada’s Sunwing, announced in November 2024 that it was removing 26 hotels from its Cuban portfolio due to quality issues and was reducing flights to the island due to falling demand.
Since the start of 2024, García told legislators, other factors had also affected arrivals numbers, including “a downward trend observed in the destination’s security perception index.” He also pointed to declining arrivals from Europe and elsewhere following the US administration’s decision to declare travellers ineligible to visit the US under its ESTA visa waiver scheme if they had visited Cuba on or after 12 January 2021, other than by applying for a visa.
Highlights in this issue:
- Government clarifies position on dollarisation
- Libreta guaranteed for 2025 but many Cubans expect value to decline
- Cruise lines seek end to Helms-Burton lawsuit following successful appeal
- Fuel purchase contract with Russia expected to be implemented soon
- Cuba formally approved as a BRICS partner country
The Minister added that 2024 had also been a tough year for tourism, “due to the lack of financing,” insurance related problems, difficulties in obtaining supplies for the sector, the high cost of fuel, and what he described as “the large communication campaign against Cuba.” He additionally attributed the fall in arrivals numbers to domestic issues including fluctuations in the workforce, migration, the cancellation of air operations, power outages, the disconnection of Cuba’s National Electric System, and meteorological challenges.
The decline in the number of visitor arrivals contrasts with the figures published by other comparable regional destinations such as Punta Cana in the Dominican Republic and much smaller Caribbean nations, almost all of which report overall demand and arrivals continuing to rise.
Rise in revenues reported
Despite the fall in visitor numbers, García claimed that the sector’s revenues in 2024 grew, compared to 2023, while noting that the figure remains below what was anticipated by the country and sector’s economic plan. However, no details of the sector’s 2024 earnings have yet been published.
In an apparent response to public criticism by Cubans about continuing high levels of expenditure on developing new hotels rather than on addressing the many hardships they face, the minister suggested that during 2024 there had been no investment in any new construction, only work on projects that were already underway.
His remarks were made before the Miami Herald published in early January leaked details of financial records it had obtained which suggested that the Cuban hotel companies Gaviota and Almest, both a part of the military related GAESA group, had billions of dollars in convertible currency in cash reserves. (See United States below). Although a snapshot, the Herald story alleged that far from being financially challenged, the sector is high earning, and the apparent surpluses rather than being used to address domestic challenges are possibly being diverted for other purposes
Better results hoped for in 2025
In his address to legislators, García spoke about the efforts being made to turn around Cuba’s tourism sector after its lacklustre performance during 2024.
Looking ahead, the minister said that Cuba hoped to receive 2.6mn foreign visitor arrivals in 2025, an 18% increase over the estimated outcome for 2024. He did not indicate, however, the markets from which he expected the incremental visitor numbers would come.
In doing so, he emphasised in relation to tourism’s recovery, the importance of improving training and work programmes, and having administrative bodies at the municipal level that have devolved responsibilities better understand the needs of the sector. He also noted that courses related to tourism are being undertaken in communities and in relation to agrotourism, with pilot projects underway in the provinces of Mayabeque and Camagüey to identify potential new tourism products to “strengthen the image of international tourism” that Cuba can offer.
As reported previously, visitor arrivals numbers from almost all of Cuba’s leading tourism markets declined in 2024. Canada, the island’s leading market, Cuba’s significant expatriate market, and key European markets including Spain, Italy, and Germany, all recorded substantial falls during the first eleven months of 2024. Only arrivals from Mexico and Russia experienced significant increases over the same period.
Despite this there are uncertainties about the sustainability of growth in the Russian market.
Recent comments by the Association of Tour Operators of Russia and Cuba’s Ambassador in Moscow suggest that while Cuba’s potential as a destination for Russian visitors is many times greater than at present, there will continue to be a limit on the number of Russian and Venezuelan operated flights available because of restrictions on the availability of aircraft and spares caused by western sanctions.
This has meant that there are significant constraints on increasing airlift and expanding services from points in Russia other than Moscow, making even proposed new services from St Petersburg problematic. Russian tour operators have also expressed concern about meeting competing demand from the Dominican Republic an already popular destination for Russian visitors.
Continuing western sanctions, the falling value of the Rouble, and negative comments on the Cuban tourism product in some of Russia’s consumer media, and the reported deep discounting of hotel accommodation to Russian tour operators and consolidators for the summer 2025 season, raise questions about how rapidly the number of visitors from Russia will increase in 2025; let alone when they may eventually reach the hoped for 0.5mn Russian visitors a year that Cuba’s tourism minister is wanting to see in the next few years.
One new market the Cuban authorities are targeting is China, as of May 2024 encouraging travel by Chinese citizens who wish to visit vias free. However, this is likely to be a long term wish with little likelihood of growth in the near future.
Impact on the economy
Although the sector continued throughout 2024 to be described by senior ministers as the driving force in the economy, the projected arrival figure for 2025 suggests that at 0.1mn fewer visitors than the estimated outcome for 2024, Cuba may struggle to achieve the foreign exchange earnings it hopes for from the sector.
Cuba’s 1% projected GDP growth for 2025 is in part based on the expected recovery of tourism, according to remarks made to the National Assembly in December by Joaquín Alonso, the Minister of Economy and Planning.Alonso told delegates at the time that overall income from tourism in 2025 is expected to remain at levels similar to those estimated for 2024, a performance he described as having had “a negative impact on the income-generating capacity of our economy.”
In another striking recent commentary, the Cuban academic and researcher, Professor José Luís Perelló, a leading national expert on tourism at the University of Havana, made clear that despite the optimism shown by the Cuban authorities, Cuban tourism faces new challenges. “If the new Republican Administration keeps its campaign promises, [Cuban tourism] will be in an even more difficult situation between 2025 and 2029,“ Perelló warned. He noted also that “the future of the country will therefore depend only on the ability to promote economic development through other means.“
Perelló’s analysis and concerns, which first appeared in the US published leftist publication, Progreso Weekly, were subsequently reported in a carefully worded report published by Prensa Latina, Cuba’s official news agency.
James Hepple, the Managing Director of Aruba-based Tourism Analytics, believes that Cuba is now likely to face an increasing regional challenge for its market share. He points to another factor that could seriously impact the future development of the Cuban tourism sector. He observes: “The Dominican Republic recently announced its intention to double the number of its tourists it receives from 10mn to 20mn a year. Given the tourism product in the DR is very similar to that of Cuba, one of the ways it can achieve this ambitious goal is by continuing to siphon off tourists from Cuba, especially from the Canadian and European markets”.