U.S.-Cuba Trade and Economic Council, Inc. New York, New York Telephone (917) 453-6726 • E-mail: [email protected] Internet: http://www.cubatrade.org • Twitter: @CubaCouncil Facebook: www.facebook.com/uscubatradeandeconomiccouncil LinkedIn: www.linkedin.com/company/u-s--cuba-trade-and-economic-council-inc- Reuters Americas Havana, Republic of Cuba 29 August 2016 New Cuba tourism seen slow to take off despite U.S. flights (L to R) Mayda Molina, an official of the Institute of the Cuban Civil Aviation, Eduardo Rodriguez, Cuba's vice-minister of Transport and Alfredo Cordero, President of the Institute of the Cuban Civil Aviation, attend a news conference in Havana, Cuba, August 29, 2016. REUTERS/Enrique de la Osa By Marc Frank and Jeffrey Dastin | HAVANA/NEW YORK An expected explosion in U.S. tourism to Cuba will likely take years to materialize even after U.S. airlines resume commercial flights to the Caribbean island this week for the first time since 1961, industry officials said. JetBlue Airways Corp (JBLU.O) will pilot its historic flight from Florida to the Cuban city of Santa Clara on Wednesday, the latest step in normalizing relations that earlier this year included a visit by U.S. President Barack Obama and the first U.S. cruise to the island in decades. The planes may some day be filled with U.S. beach-goers, looking for an economical Caribbean break at resorts favored by Canadians and Europeans on the sandy keys north of Santa Clara. But for now, U.S. law and constraints on Cuba's tourism infrastructure will act as brakes on increasing demand, experts said. Congress has yet to lift a trade embargo that prohibits U.S. citizens from visiting Cuba as tourists. The Obama administration has approved 12 categories of exceptions to the ban ranging from cultural, religious and educational travel to business and visiting family. That means JetBlue's initial flights will mainly carry Cuban-Americans visiting relatives or other U.S. citizens interested in seeing the Che Guevara Mausoleum and other cultural sites. Eventually, up to 25 flights a day by various carriers will connect the United States and the Cuban provinces, with another 20 to Havana, under an agreement reached by the two Cold War foes as part of a gradual détente begun in December 2014. Services on Silver Airways and American Airlines Group Inc (AAL.O) from the Miami area to other outlying provinces are the next to start, in September. While the direct flights could carry more than a million U.S. residents to Cuba annually, according to John Kavulich, head of the New York-based U.S.-Cuba Trade and Economic Council Inc, he and other experts believe that mark will not be reached for several years. In the beginning, the new routes are expected to absorb customers from the average of 17 charter flights that Cuba's government says have arrived from the United States daily for several years. "The fares that have come out so far, announced by American and JetBlue, have been super competitive," said Bob Guild, vice president at Marazul Charters Inc. "I don't have any question that it's going to shrink," he said of the charter services. Marazul, one of the largest charter companies operating to Cuba, plans to scale back services to provinces this fall but continue with its Havana flights while commercial airlines await approval, Guild said. There is already a boom in visits to Cuba from the United States. Some 300,000 Cubans living in the United States now travel home annually. In 2015, the Cuban government reported 161,233 Americans visited, compared to 91,254 in 2014, and arrivals through June nearly doubled over the same period last year, a trend that the dawn of commercial flights can only further. "The fact that travelers can book flights directly online not only streamlines that process and makes it more affordable, it adds a feeling of legality," said Collin Laverty of Cuban Educational Travel. But another barrier to increased U.S. travel is that Cuba's hotels, bed and breakfasts, transportation services and amenities are already stretched to the limit, with a record 3.5 million foreign arrivals last year. Higher hotel prices, pegged to the U.S. dollar, might push out some travelers from Europe and Canada, creating more space for Americans, said Emilio Morales, CEO of Miami-based Havana Consulting Group. Private bed and breakfasts would absorb what they could of increased demand, he said. Over time, airlines are betting travel restrictions will be further relaxed and want to get their foot in the door before Obama leaves office next year. "While all of the flights are unlikely to operate at capacity, the airlines want to plant their respective flags," Kavulich said. The Journal of Commerce Newark, New Jersey 24 August 2016 Cuba shipping gains unlikely in the short term It could be some time before Cuban container cranes, such as these pictured in Havana, start lifting more volumes bound for international markets. Greg Miller, Special Correspondent Despite all the hype on Cuba, commercial shipping's opportunities to do business with the island are unlikely to significantly improve until at least February 2018. U.S. President Barack Obama has since December 2014 used his regulatory powers to ease restrictions on U.S. business ties with Cuba. In the maritime industry, the highest-profile example was permission for Carnival Corporation to offer cruises to Cuba. However, volume gains for commercial shipping still hinge on the U.S. Congress lifting the embargo on trade with Cuba and repealing the “180-day rule,” which prevents ships without a waiver calling at a U.S. port within 180 days of visiting Cuba. “Since December 2014, the legislative efforts have been almost a waste of time,” said U.S.-Cuba Trade & Economic Council President John Kavulich in an interview. “You have a lot of inspiration and a lot of aspiration chasing very little reality.” “When it comes to Cuba, there has been more public relations than actual growth,” said Carlos Urriola, senior vice-president of Carrix, the parent of port group SSA International. “Even if things are starting to move forward, it’s not going to change tomorrow.” Commentators have focused on the potential for lifting the trade embargo after a new U.S. president is inaugurated and a new Congress convened in January 2017. However, Kavulich sees that timetable as overly optimistic. “There will be no legislative changes before President Obama leaves office and after his presidency Cuba is not going to be a priority on the list of issues facing the new president,” he said. "Nor should it be. It shouldn’t be high on anyone’s agenda, because no one (in the U.S.) needs Cuba. Cuba is not China, where if a company doesn’t have China it can put the company in jeopardy. Cuba doesn’t have that role.” Any political momentum for ending the U.S. embargo will be focused on a later date: Feb. 24, 2018, according to Kavulich. “That is the date when (Cuban president) Raul Castro has said he’s going to retire, so members of Congress on both sides of the aisle will look at the process and say, ‘We should hold back on making changes because we want to have something to either use as bait for Raul’s successor or to reward Raul’s successor. Let’s not give everything now to the old guy. Let’s try to enhance the new people,’” he said. In other words, the closeness of Castro’s retirement date — just 13 months after the U.S. government’s transition — will effectively push back the timetable for transformative change until 2018. Hopes have been raised within maritime circles that the 180-day rule could be repealed before the trade embargo is lifted. While the U.S. president can exempt shipping companies on a case-by-case basis, abolishing the rule would require an act of Congress. If the 180-rule were revoked, container lines could use neo-Panamax ships to drop off Asia-sourced transshipment cargo at the PSA-operated terminal in Mariel, Cuba, and then continue on their front-haul voyages to final destinations in the United States. The challenge facing this lobbying effort is that U.S. business interests would not necessarily benefit. In fact, some could be harmed. Repealing the 180-day rule would allow no additional U.S. export volumes to Cuba beyond the currently permitted cargo categories. However, Mariel would be enabled to develop a transshipment business to serve Caribbean islands in direct competition with U.S. exporters and U.S.-based liners sailing out of ports in Florida and along the U.S. Gulf Coast. “For U.S. ports, having Mariel as a receptacle for U.S. exports is great, but having Mariel as a potential competitor is not. That’s where the challenge is,” said Kavulich. “By opening the 180-day rule, you’re hitting Miami, you’re hitting Port Everglades, you’re hitting Jacksonville — and what would you (the U.S.) get in return?” Carrix’s Urriola said. Ending the 180-day rule and providing an economic boost to Cuba prior to Castro’s retirement would also go against the grain of America’s long-standing strategy, said Kavulich. “There is a feeling that we (referring to U.S. government leaders) don’t want to be giving the current Cuban government any more money it can use to perpetuate itself, because the more money it has, the less incentive it has to change," he said. "We want to make it difficult for them, so they have to make the changes.” iHLS (Israeli Homeland Security) Tel Aviv, Israel 24 August 2016 המינהל האמריקאי לבטיחות בתחבורה הודיע השבוע כי ארה"ב הגיעה להסכם עם קובה אשר על פיו יורשו מאבטחים לעלות על טיסות בין היעדים כיוון שהם מהווים