Implications of resuming US-Cuba commercial flights

The US-Cuba thaw continues to materialize in concrete actions. A few hours ago, both countries agreed to resume direct regular flights for the first time in more than 50 years.

As informed, the air routes between the two nations will be operational as from September. The deal contemplates 20 daily flights to Havana and 10 daily flights to other airports on the island, although at a subsequent stage this frequency might increase to 110 daily flights. There are even several airlines already interested in flying to Cuba.

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This agreement not only has a huge symbolic value but also provides major economic boost to the island, where the tourism sector is positioned as a key player. In fact, during my frequent journeys to the island, I have witnessed an increasing number of Americans strolling around Havana, despite their government’s current ban to tour the country.

High demand, few hotel beds

Traditionally, nearly 3 million tourists used to arrive in Cuba every year. However, by the end of 2015 a double-digit growth record was achieved. And 2016 started off with visitor numbers rocketing skyward – at the end of January, the number of foreigners visiting Cuba climbed to 417,764, with Canadians at the top (173,727), Italians ranking second (23,009), Germans third (21,473), and Americans fourth (20,997), pushing France to a fifth position (19.140).

With this scenario, Cuba urgently needs to underpin its hotel infrastructure. In fact, competition among airlines will surely bring about a significant drop in airfares, and American citizens will be able to buy their tickets readily online, as they do when they travel to any other destination in the world. Thus, it is easy to predict that an exceptional opportunity lies ahead to develop first-class hotels. Without a doubt, Cuba needs more high-end rooms and services.

This year, Cuba will receive about 4 million foreign visitors, a true tsunami for the island that is urgently expanding its tourism infrastructure.