Travel to Cuba Has Risks for Travel Agents

Nov 28, 2011

For years, there has been pent-up demand from Americans for travel to Cuba. Back in January, when President Obama announced that he would ease Cuba travel restrictions and restore the once-legal people-to-people educational travel program, it seemed that the time had come for more travel to Cuba. If the floodgates weren’t exactly open, it at least seemed that the door had been nudged a crack.

Airports across the country quickly won permission for Cuba flights, including airports in Key West, Tampa and Fort Lauderdale, Fla., Baltimore, Chicago, Atlanta, New Orleans, Dallas, Houston and San Juan, Puerto Rico.

Major tour operators Abercrombie & Kent (A&K) and the Globus Family of Brands announced Cuba travel programs.

But those of us watching Cuba travel are accustomed to move and counter move, and it soon became obvious that the situation was anything but clear. Travel agents should tread carefully when it comes to booking Cuba travel.

“Cuba is not open — it is still restricted to Americans, although it is almost totally open to Cuban-Americans to travel to Cuba to visit their families,” said Ronen Paldi, president of Portland, Ore.-based Ya’lla Tours USA, a company that arranges humanitarian tours to Cuba.

According to Paldi, there are about 350 Travel Service Providers (TSPs) that can provide travel to Cuba. Of these, 95 percent are travel agencies owned by Cuban-Americans and only exist to service the Cuban community. A normal retail agency or tour operator cannot sell travel to Cuba; they must be licensed. Only a TSP can touch the money. No promotion or advertising of travel to Cuba is allowed under the law.

“Ya’lla is the only TSP that chooses to work with travel agents,” said Paldi. “The way it works is that travel agents refer their clients seeking Cuba travel to us and we then pay the travel agent a referral fee.”

Paldi noted that the company receives about 30 inquiries a day about Cuba travel from travel agents. This represents a five or six times increase over last February. Paldi credits this jump in inquiries to the buzz created by A&K and Globus, when they announced that they would be offering Cuba programs. Subsequent Department of State travel advisories to Cuba inspired a change of heart in the two tour operators, and A&K and Globus changed their plans and have adopted a wait-and-see attitude regarding Cuba travel.

A spokesperson from A&K further elaborated to TravelAge West on why the company backed away from offering travel programs to Cuba: “It became clear that there wasn’t a clear path to paying travel agents a commission, and travel agents are our most important customers. We also felt that the OFAC [U.S. Treasury Department’s Office of Foreign Assets Control] guidelines were open to interpretation, and we stopped taking reservations on Aug. 14.”

Two companies to watch are Austin-Lehman Adventures and National Geographic Expeditions. Both companies recently announced Cuba travel programs, and both declare that they pay travel agents a 10 percent commission on Cuba bookings.

The Future of Cuba Travel
As far as loosening the restrictions on travel to Cuba, Paldi thinks that much depends on the outcome of the 2012 Presidential election.

“If Obama is elected, things will stay the same,” he said, “if a Republican is elected, we might see even more restricted travel to Cuba.”

One source had a jaundiced view about the Cuban governments’ attitude toward an impending flood of American visitors once travel to the country is open.

“The Cuban government is terrified at the prospect of 1 million Americans descending on the country,” the source said. “This is the figure projected for the first year’s visitors from the U.S. after the country is fully open. They are afraid of what kind of effect this will have on the country — of so many Americans mingling freely with the Cuban people.”

Insight Cuba is a division of Cross Cultural Solutions, which specializes in short-term volunteer programs abroad. Last summer, the company was reauthorized by OFAC to send U.S. citizens to Cuba.

“My advice to agents is to call a licensed entity such as Insight if they have clients interested in traveling to Cuba,” said Tom Popper, director of Insight Cuba. “There’s no doubt that there’s confusion in the marketplace when it comes to Cuba travel.”

At this time, Insight Cuba does not pay a commission to travel agents.

“We’re ready to work with travel agents as soon as the Cuba travel policy changes,” said Popper.

Insight’s tour groups are held down to a manageable size of 15 participants, and more often than not comprise 12 to 14 people. The People-to-People initiative requires Americans to take part in various cultural experiences in Cuba, essentially, as the name implies, putting them in direct contact with the people of Cuba with hopes of learning about their way of life in the country.

“Full participation in the tour program is required,” said Popper. “But generally by late afternoon, after a full day of activities, participants are free to join in optional evening activities or to explore Cuba on their own.”

Popper gives a snapshot of the current Cuba-bound American.

“The ideal traveler to Cuba is the curious traveler, someone who’s open to seeing things they never thought possible,” said Popper. “People don’t go there for the hotel and food experience — they go for the culture and the people.”

Travel Agents’ Boots on the Ground
Suzanne Homme, a leisure travel specialist with Palm Desert, Calif.-based ProTravel International, visited Cuba three years ago as a participant in a Ya’lla Tours humanitarian visit.

“You need to have your travel planned by a company like Ya’lla, who can get all the details of traveling to Cuba right,” advised Homme.

Homme also noted that Cuba doesn’t live up to U.S. standards.

“Your hotel rooms are searched, but we had been told that would happen beforehand,” said Homme. “I suppose they were looking for propaganda materials. I wasn’t very impressed that the searcher left his gloves and his hat in my room.”

This was Homme’s first visit to a Communist country.

“When we visited a medical clinic, facilities were poor at best and schoolrooms had three or four age groups in one classroom and, when we came in, they stood up and sang a song about Fidel Castro. As we toured the country, we also saw billboards with anti-American slogans.”

Surprisingly, these billboards weren’t offensive to Homme.

“Seeing this gave us an understanding of how things really were in Cuba,” she said.

Homme especially enjoyed the part of the itinerary that sent them to the eastern region of Cuba, to the city of Santiago de Cuba, although getting there was an adventure.

“We flew a domestic flight from Havana to Santiago de Cuba on a 1960’s-era Russian plane,” she remembered. “It was spooky. The seats weren’t fastened to the floor, and you could feel wind coming in through the fuselage.”

Homme recommends dining at casa particulars. These are small, family-run restaurants operated out of private homes with only a handful of tables and chairs.

“The selection is so much better than in the hotel restaurants — you’ll find the best fresh fish and even lobster,” she said.

Even with all the bumps along the way, Homme is bullish on Cuba.

“It’s a life-changing trip, with lovely people,” said Homme. “We had a couple in our group who loved it so much that they sent their 20-something sons to visit Cuba.”

Is Cuba Ready?
When it comes to Cuba’s readiness for welcoming American visitors, Paldi thinks there is much to be done.

“They lack hotel rooms, transportation, parking facilities for tour buses and tour guides,” he noted. “However, the Cuban government is investing in upgrading its airports — which is important since it’s the gateway to the country.”

Paldi also said that Cuba is an expensive destination.

“Cubans are charging Americans 70 to 100 percent higher prices than they charge Canadians and European tourists,” he said. “Fidel Castro created the Cuban Convertible Pesos currency. Americans pay a 13 percent penalty when they convert their dollars.”

Larry Luxner, the editor of Cuba News, a publication devoted to covering developments on the island, had an interesting solution to this inequity — he advised American tourists to convert their dollars into euros before departing for Cuba.

“Americans are really interested in Cuba,” said Luxner. “The caliber of the American tourist visiting Cuba on people-to-people programs is really high. They’re educated and likely to speak Spanish.”

Luxner has visited Cuba 15 times, and has plenty of experience.

“Don’t expect things to run like clockwork because they won’t,” he said. “You may arrive at the airport and find that there are no rental cars available; in fact, you may not be able to rent a car for the duration of your visit. If you go to a show, it may not go off as scheduled. Service is generally bad. If you are a worker in a state hotel and you’re making the equivalent of $20 a month, you’re not motivated to work very hard.”

Luxner has some advice for those planning a Cuba visit.

“If you’re there as a tourist, be a tourist,” said Luxner. “Don’t go asking political questions. It’s important to remember that Cuba is not a democracy.”