Of Inaugurations and Authoritarian Regimes: The Case of Tourism in Cuba

Varadero Melia International Hotel (Trivago)

14ymedio biggerElías Amor Bravo, Economist, 16 September 2019 — Each dictator celebrates the inaugurations of what they can, or what they leave. There is a close relationship between authoritarian power and political celebratory openings. In the case of Franco, it was common to see him in the “News and Documentaries” — known as No-Do — inaugurating reservoirs for the production of hydroelectric power and storing water for the areas with the lowest rainfall in southeastern Spain. The reservoirs have been left for posterity and have a much wider use than originally planned. Generally, no one questions them, except for some radical environmental organizations. In the case of Díaz-Canel, another authoritarian leader, he loves to attend the openings of hotels.

On this occasion, the new facility has been named the “Hotel Meliá Internacional Varadero” because although the building belongs to the Diaz-Canel regime, the establishment is managed by the Mallorcan company Sol Meliá. The project is engaged in an open dispute wih the legitimate owners under the protection of Title V of the United States’ Helms Burton Act. So, before a large group of representatives of his government, such as the person in charge of tourism, Marrero, and even the president of Sol Meliá, Díaz-Canel said that the new hotel is intended to “become a hotel of excellence in the main tourist center from the country.”

The Cuban government’s commitment to tourism is apart of the little it has left to face the current serious crisis situation, but the prospects are not good. The National Statistics Office of Cuba, ONEI published on its website a report of the tourism sector between January and June,and almost simultaneously, another Informative note regarding the period from January to July to show the number of international visitor arrivals.

It is interesting to note that in the first period (from January to June), there was a 2.4% increase in the number of travelers compared to the same period of the previous year. This is the data that has been disseminated in the media and through social networks. On the other hand, the other more recent data in of travelers to the month of July, what really took place is a 1.1% decrease in the number of travelers.

The reason is explained in the second Note to which reference is made. In July, the number of travelers entering the island was only 295,042, with a collapse in that month of 23.6%, the equivalent of 90,992 fewer tourists. Almost 100,000 stopped coming to Cuba in July compared to the same month of the previous year.  A very bad month, very bad prospects. As a result, the collapse in the figures accumulated in the period from January to July, increasingly far from the objectives of the regime.

The Sol Meliá business group has bet on tourism in Cuba since the distant times of the Special Period, accepting the management formula offered by the Castro regime, unique throughout the Caribbean region. A formula that undoubtedly benefits two parties, as has been the occasion to verify since it has been maintained despite the difficulties that have arisen, which are not few. In addition, the effort put into management and organization of facilities in Cuba has not returned the expected results to the Spanish hotel chain. Their annual reports make this clear.

At first, the chain opted for the future, thinking that the Special Period at some point would have to disappear. Then came the “objective” of 5 million travelers which has remained unmet and with levels of occupancy levels much lower than other resort destinations in the Caribbean (The Dominican Republic attracts 11 million a year). Also, how curious, with the passing of the years, the Spanish hotel group is again faced with a similar situation, which is not the same as the Special Period, when it began operations on the island. The feeling of “deja vu” among the chain’s managers must be more than evident. And in the midst of these low levels of tourist activity, this new hotel is launched, in an area that is already relatively congested with hotel rooms, and that has lost much of its international pull.

The Sol Meliá company manages this magnificent establishment, which, however, it may lose at any time given the contractual conditions; but there is the Varadero International, a five-star luxury, with its almost 1,000 rooms in different dimensions and characteristics, modern from the technological point of view, with a commitment to quality and all kinds of installations and facilities for the use of customers. Nothing is known with respect to what the cost has been for the Castro regime, its owner, but it should not be cheap, of course, and in difficult times like today, less still.

The question that always arises in these cases is whether there is another alternative model to tourism in Cuba, other than this state monopoly under the management of international groups. The results of the current model are known. The volume of travelers has stagnated and there are bad prospects for the following months, during which in every year, another hurricane makes an appearance in the Caribbean.

In my opinion, there is an alternative. The world tourism powers, including Spain, the country to which the Mallorcan group belongs, need to rely on the the capabilities and resources of private initiative, and not of the state. To be true, there is some kind of state participation, in Spain, for example Paradores, to exploit emblematic buildings with history and heritage, but recently doubts have been raised as to whether state management should be maintained.

The Castro regime should know that tourism is mostly a private activity, which is carried out by private companies that have a clear orientation to the market and to meeting the needs of customers. Tourism should not be a propaganda device of any authoritarian regime. Fraga Iribarne, in his time as minister of the branch, managed to ensure that tourism in Spain did not take this route. In the United Kingdom it is perfectly possible to tour the country in a wide and extensive network of bed & breakfast accommodations that delight the traveler. The same happens in France and Italy, as in Spain, where the private hotel sector coexists with these establishments that offer high quality services to travelers.

In Cuba, this model must be supported more, because we have already what the state model achieves. And the little route it has. If it is intended to increase tourism, and make it a sector that contributes resources to the national economy, we must advance in the privatization of the sector and let it be privately owned at all levels of accommodations. The state can make cash and devote it to other infrastructure investments that the country needs. There is no other alternative.

The state monopoly in any economic activity, has a limited route, and it is enough to compare tourism data in other areas of the Caribbean, Dominican Republic or Cancun, with Cuba to see that the problem of tourism in Cuba is in who directs it, controls it and is dedicated to the propaganda of authoritarian inaugurations. That’s how it goes.


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