Castro's Departure Could Mean Opportunity For Cruise Industry Says Analyst

News of Fidel Castro's decision to step down as Cuba's leader, a position he has held for nearly 50 years, having outlasted nine U.S. presidents and countless assassination plots, is being observed as a step in the right direction, though many believe not much will change.

Tourism, an industry always on the lookout for new markets, would greatly benefit if the U.S. decided to lift its 40-year embargo of Cuba and allow U.S. entities to do business with and within the Caribbean island. Even President Bush expressed hope that Castro's departure would be "the beginning of a democratic transition." Others say that the transfer of power to Castro's brother, Raul, will be nothing more than just that: an exchange of leadership, which will follow the old leadership.

Nevertheless, if changes are made-and Raul is seen as more progressive than his older brother-than the cruise industry would be one business to greatly benefit if it is granted access to Cuba and its ports. Not only is it another source market, for decades Americans have shown a willingness to visit the country, for its fantastic beaches, culture and face it-the best cigars in the world!

Robin Farley, the leisure and gaming analyst for UBS, last week issued some statements regarding Cuba as a cruise destination. "The potential for Cuba to be opened to American tourism represents a significant opportunity for cruise operators," she wrote. "New leadership could be a positive event for the cruise industry if diplomatic relations resulted in the opening of Cuba to American tourism."

Cuba is only 230 miles from Miami, and its close proximity would allow it be part of a variety of itineraries, according to Farley. In addition, the cruise industry would be in a position to benefit more quickly than U.S. hotel operators. "Havana is a natural deep-water port and we believe operators could build dockside infrastructure on a much faster timeline than it would take to build U.S. branded hotel product," Farley wrote, adding that a lack of hotel infrastructure would favor cruise ships as the mode to visit the island. "Itineraries could be sold with just several months advance notice."

Time will only tell if this becomes more than a pipe dream and, too, if the opening of Cuba would hurt other Caribbean islands' tourism business. (DE)

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