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No Longer Off-Limits to Cubans with Cash Experts Ponder Cuba Tourism Potential As Raúl Cautiously Opens up Economy

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No Longer Off-Limits to Cubans with Cash Experts Ponder Cuba Tourism Potential As Raúl Cautiously Opens up Economy Vol. 16, No. 4 April 2008 www.cubanews.com In the News Cellphones, computers, DVDs and hotels Brussels and Rome no longer off-limits to Cubans with cash Cuba seeks better ties with both the Euro- BY LARRY LUXNER al computers, DVD players and other forbidden products. Resolution 43/08 of the Interior Com- pean Union and the Vatican...........Page 3 his was no April Fool’s Day joke. Effective at midnight Apr. 1, ordinary Cubans could merce Ministry permits the sale of computers, video-playing equipment, electric pressure Cuba 2010 T for the first time in years stay at tourist hotels formerly reserved for foreigners and cookers, rice cookers and even car alarms to the Former diplomat Vicki Huddleston pres- even rent cars — as long as they pay with hard- general public for the first time since the 1990s. “The country has had an improvement in the ents a ‘worst-case scenario’ ..........Page 4 to-get CUCs and not nearly worthless pesos. And starting Apr. 14, mobile phone service generation and distribution of electric power,” will be available for the Cuban population, fol- explains to a government document circulated Banking on reform lowing an announcement as we went to press among foreign journalists. The document says Financial institutions take a ‘wait-and-see’ that the new government of Raúl Castro would the availability of these new electronic devices will be “gradual” in order to ensure that they attitude with regard to Raúl .........Page 6 lift all restrictions on cellphone usage. In fact, Cuba has introduced more reforms in meet state energy-saving standards. the last five weeks than in the past five years. Meanwhile, says Reuters, agriculture is being Tehran-Havana axis “In the next few weeks, we shall start remov- decentralized, farmers can decide for them- Miami meeting focuses on Cuba’s warm- ing the most simple excessive regulations and selves what supplies they need and the prices prohibitions,” Raúl, 76, said in his first speech as paid to them are rising to boost food production. ing relationship with Iran .............Page 7 president after officially taking over Feb. 24 What’s going on here? from his ailing older brother Fidel. “The situation is very different from the crisis Newsmakers True to his word, on Mar. 13, the government of the 1990s,” said a Havana-based economist Col. Larry Wilkerson, chief aide to former lifted a long-standing ban on the sale of person- See Reforms, page 15 Secretary of State Colin Powell, thinks U.S. policy on Cuba stinks ....................Page 8 Experts ponder Cuba tourism potential CUNY conference as Raúl cautiously opens up economy Canada, Mexico issues take center stage at Cuba seminar in New York ......Page 9 BY LARRY LUXNER me, ‘Where’s your Che T-shirts?’ I tell them I long crowded, quirky Duval Street in can’t sell that here.” Port of Nuevitas downtown Key West, Fla., the karaoke Not yet, anyway. A bars, burger joints, art galleries and tacky Che Guevara, the global symbol of revolution, Shipping port in Camagüey province owes T-shirt vendors all sing the praises of Jimmy is anathema to the one million or so Cuban its former glory to sugar ............Page 10 Buffett’s “Margaritaville” and the Florida Keys. exiles who call South Florida home. But one shop is oriented a little further south Even so, U.S. multinationals ranging from Business briefs — about 90 miles south, to be exact. Marriott to McDonald’s have gazed longingly at The Cuba! Cuba! Store at 814 Duval St. lures Cuba since the early 1960s, waiting for Fidel Cas- Regime yanks licenses of 14 foreign firms; in customers with decorative cigar boxes, coffee tro to quit or die so they could once again flood Turkey to explore for Gulf oil ....Page 12 mugs, music CDs, baseball caps, Cohiba ash- the island with their products and services. trays and keychains glorifying all things Cuban. Banks, hotel chains, cruise-ship companies Mysterious Machado? Yet because of the U.S. trade embargo, noth- and travel agencies all see Cuba as a virgin mar- ing in this boutique — except for back copies of ket, waiting to be exploited — and Key West, A look at Cuba’s new No. 2 man and his Cigar Aficionado, a few choice paintings and lit- far from being hurt by the competition, could new subordinates ........................Page 14 tle figurines which qualify as art — actually cash in big-time, thanks to its status as the clos- comes from the forbidden island (the baseball est point in the United States to Cuba itself. CubaNews (ISSN 1073-7715) is published monthly caps are assembled in Haiti and Nicaragua). Says Winters: “If they put the ferry boat back by Luxner News Inc. © 2008. All rights reserved. “We’re so close to Cuba that I thought this into service, I think there could be a steady Subscriptions: $429 for one year, $800 for two years. store would be a good idea for Key West,” shop- stream of people driving to Key West, just like in For editorial inquires, please call (301) 452-1105 the old days.” or send an e-mail to: [email protected]. owner Larry Winters tells us in between assist- ing customers. “A lot of European tourists ask See Tourism, page 2 & E 1 $ LO IL O GI $0 2 CubaNews ❖ April 2008 new rooms will be in Havana, which along Vancouver-based LCI currently has three Tourism — FROM PAGE 1 with Varadero accounts for 70% of Cuba’s projects in the pipeline. The first is Monte But with 81-year-old Fidel now writing tourism revenues. Barreto, an all-suite hotel that’ll be built in essays from his sickbed and younger brother Plans for developing tourism through 2010 three phases on a site in the Miramar suburb Raúl, 76, officially running Cuba, it looks as if call for building new facilities, promoting the of Havana. The $33 million project envisions a the waiting game will go on a little longer. new Hoteles E chain and investing in activi- 737-room tower of seven or eight stories. “The critical factor here is what the process ties like scuba diving, boating and golf. At the The second project consists of a 400-unit, the Cuban government will use to open up the end of 2007, according to government statis- high-end resort on the island of Cayo Largo, economy,” says Carlos Saladrigas, vice-chair- tics, Cuba had 46,000 hotel rooms in 307 prop- and the third will be a sprawling resort at man of Miami-based Premier American Bank erties, 23% of them in Havana. Jibacoa — halfway between Havana and and founder of the Cuba Study Group. Spanish hotel group Sol Meliá is the lead- Varadero — that’ll eventually have two golf “The next few months are going to be ing hotel brand in Cuba, with 24 four- and five- courses and several hotels and luxury villas. So far, LCI has spent $23 million in Cuba, even before a single shovel is sunk into the ground, and Jennex said total investment could reach $500 million. LARRY LUXNER CRUISE-SHIP INDUSTRY SUFFERING “What the Cubans have done is built their industry around the package tours, which are all-inclusive,” he said. “That kind of clientele is not loyal. They open up the paper and look for the cheapest deal. Cuba now realizes that if they want to augment the amount of dollars per visitor, they’ve got to create an industry that caters to high-end travelers.” Dubai’s Profile Investments Group, which has substantial interests in the United Arab Emirates, India, Cape Verde and North Africa, last month finalized a deal to acquire 49% of LCI. This follows a much larger deal announced by Dubai Ports World to invest $250 million in rebuilding and modernizing the Port of Mariel, just west of Havana. Sign above Key West. Fla., souvenir shop drives home the fact that Havana is a lot closer than Miami. Although unrelated, both investments are incredibly telling. Rumors are abundant that star Meliá, Tryp, Sol and significant economic reforms are about to be Paradisus properties across undertaken,” said Saladrigas, who fled the the island. Other large island in 1961. “What I don’t understand is chains managing hotel why Raúl is purposely raising the expectations properties in Cuba include of the people for change. If he doesn’t intend two Jamaican companies, to deliver, he’s either a fool or he’s crazy.” Sandals and Superclubs, Economically, Cuba hasn’t been doing and Spain’s Iberostar. badly. Growth last year came to around 10%, Cuba’s state-run chain, boosted by record-high prices for nickel, the Gran Caribe, has more than island’s chief export commodity. Tourism 12,300 rooms in 50 hotels brought the island revenues of about $2 bil- including some of the capi- lion in 2007 — compared to $2.2 billion for tal’s most famous proper- nickel — and accounted for some 300,000 ties: the Hotel Sevilla, jobs, according to Cuban officials. which marks its 100th anni- versary this year; Hotels CUBA TRIES TO REVERSE SLIDE IN ARRIVALS Victoria and Presidente, Yet the island’s tourism advantages have both in Havana’s Vedado been offset in recent years by a lack of invest- district, and both of which LCI’s planned 737-room Monte Barreto hotel in Havana’s Miramar district. ment in hotel maintenance, Washington’s mark their 80th anniver- sary in 2008; the Habana Libre Tryp, which clearly banking on an end to the U.S. travel punishing embargo and an unfavorable for- ban and a resumption in trade sometime in eign-exchange policy toward the U.S.
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