Argentina, Brazil, and Cuba – Three Major Players Betting on the Hospitality Business Future

“Don’t mix up potatoes with sweet potatoes,” my grandma used to say when she wanted us to speak clear. Of course, we do not want to do that when talking about three markets that have their own characteristics, features and background, but that are currently going through a process that may substantially change their share in the business in question.

obama

Cuba

The most resounding case that is creating high expectations is without a doubt what may happen during President Obama’s upcoming visit to the great Caribbean island.

When next Monday 21 Air ForceOne lands at Havana’s international airport, 88 years will have gone by since a US president in office set foot on the island.

Indeed, it is a huge event marking the culmination of a new stage started in December 2014, when both heads of state, Raul Castro and Barack Obama, resumed talks after more than 50 years of hostility.

In 2015, over 3.5 million tourists arrived in Cuba, i.e. no less than 17.5% more than in 2014. It is an extraordinary number given the fact that US citizens are still prohibited from travelling to Cuba. The truth is that through the “People to People travel for Education” program or by resorting to some of the twelve categories (general licenses) whereby American visitors can legally travel without requiring authorization, the number of US citizens has increased significantly on a monthly basis.

What might be expected if, as rumoured, President Obama’s visit were an excuse to announce a certain degree of flexibility regarding the travel issue? There are high expectations in this sense and let’s hope something happens. In fact, it would not only be a legitimate recognition but a way of leaving behind the disgraceful penalty provided for by Section 515.560 of the embargo in connection with all travel-related activities.

In a few days’ time the mystery will be solved. A very good piece of news for Cuba and the world as a whole that Latin America will see as a great victory.

It would be the beginning of a path that will indeed help Cuba become one of the world’s major tourist destinations.

If so, the conditions will be in place for the largest island in the Caribbean to welcome more than 10 million visitors a year in the 2020s.

In such a context, CETIS, the first industry-related conference, is very optimistic about any news that may arise during President Obama’s visit.

Argentina

Obama will also visit Argentina prior to returning to Washington. In this case, only 20 years have passed since the US and the Argentine presidents met in this South American country. Certainly, President George Bush stayed 36 hours in Argentina in 2005, during the Summit of the Americas, but on that occasion President Néstor Kirchner refused to meet with President Bush, and let the then President Chávez organize a counter-summit to show his hostility toward the United States.

These days the Argentine Congress is debating the laws that will allow President Mauricio Macri to put an end to the holdouts dispute and thereby end the default that has lasted no less than 14 years.

If this is materialized, as most people hope and the first political surveys seem to corroborate, a new recovery scenario will gradually emerge, thus offsetting one of the worst crisis ever.

It would be a memorable week if, apart from ending his visit to Havana with the above announcements, Obama met in Argentina with President Macri. Can you imagine if the two together embarked on a new path with the default dispute already ended?

This would lead to the arrival of major investments and, certainly, to the start of a new stage of tremendous growth for the hospitality business in the country.

The nearly 6 million visitors that currently arrive in Argentina every year can increase to up to 12 million in the 2020s, while domestic travels can double their impact in the next five years.

In a few days, we shall know if President Macri, even with a minority in Congress, can demonstrate his leadership capacity with a victory that will allow the country to resume a growth path from which it should never have deviated.

Brazil

It sounds like the most complex case, at least in terms of its uncertain future.

One might wonder about the reasons for this uncertainty. The answer is that, soon after commencing her second mandate, President Dilma Roussef has faced a series of crises – first, an economic crisis that the government concealed but then came to a head just a few days after Dilma started her second period. This forced her to adopt an orthodox economic program that has been resisted by her followers and part of the population.

In addition, a series of corruption cases have mushroomed and are seriously threatening political stability, so much so that President Dilma is trying to stymie efforts to have her impeached, which would definitely terminate her mandate and force her to call for elections to choose a new president.

And as if that were not enough, ex-President Lula was recently arrested at his home and taken in for questioning about the petrolao, one of the worst cases of corruption affecting the ruling party.

Indeed, the notorious petrolao affaire involving Petrobas, the state oil company, has already sent to jail one of the most powerful and renowned Brazilian tycoons, Marcelo Odebrecht, the president of the giant Odebrecht. He has been sentenced to 19 years in jail and it seems that the scandal is not over.