HomeCubaExpert: Investments in tourism in Cuba are irrational

Expert: Investments in tourism in Cuba are irrational

Even if the official forecast for visiting Cuba in 2022 is fulfilled, more than half of the hotel rooms will be empty, according to economist Pedro Monreal, who proposed to suspend investment in tourism.

Cuban economist Pedro Monreal said it would be “rational” for Cuban authorities to “pause investment in hotels” due to the decline in international tourism and the country’s economic crisis.

The expert said Cuba has a total of 77,809 hotel rooms, up 13% from 2020, when the Covid-19 pandemic began and tourist visits to the island plummeted.

The 8,930 new numbers opened since 2020 represent an investment of $1.473 billion, according to the economist’s calculations, based on the lowest possible cost provided by the Cuban government’s Business Portfolio.

However, the expert noted that the island authorities “did not make any statement about the origin of these funds.”

Montreal calculated that “even if the country receives 2.5 million international visitors in 2022, more than half of Cuba’s hotel rooms will remain empty,” as the average number of visitors per room was 69 in 2018, much higher than 32 in this year.

“It would seem rational to take a ‘pause’ in investments in the hotel business. There are other priorities,” the specialist said.

Despite continued advice from Cuban economists to cut tourism investment, the island’s authorities have continued to build hotels in recent years, which have been marked by a sharp drop in international visitors and forecasts of a slow recovery.

According to ONEI, the number of international travelers who visited Cuba last year was 573,944, down 60% from 2020.

The Cuban economy will receive $1,159 million (€1,012 million) if the country reaches the government’s target of 2.5 million visitors by the end of 2022.

However, five Caribbean countries are among the top travel destinations for summer 2022, and Cuba is not among them.

Although the Cuban authorities expect an increase in the number of tourists in 2022 compared to 2020 and 2021, the truth is that the war in Ukraine and the subsequent closure of European and North American airspace to Russian commercial flights have blocked this market, which is the most important source of tourists for Cuba.

At the recent International Tourism Fair in Varadero, Prime Minister Manuel Marrero said that the full recovery of the leisure industry will happen in 2023, not in 2022 as expected.

Cuba received 450,000 foreign tourists in the first quarter of this year, according to official figures. In the first three months of 2019, 1,470,457 guests arrived on the island, and in 2020, when covid-19 raged around the world and entry into the country was limited, just over 982,000.

Border closures, rising unemployment due to the global economic slowdown, and other impacts on potential visitors have sent Cuban tourists from 4,275,558 in 2019 to less than 1.1 million in 2020 and nearly 574,000 last year .

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