Cuba tour operators struggle to find enough hotel rooms

Full house: Cuba tour operators struggle to find enough hotel rooms

International travel to Cuba up by double digits
Business booms but hotel rooms are scarce
As demand increases, room rates have spiked
BY MIMI WHITEFIELD
mwhitefield@miamiherald.com

HAVANA
There's scarcely any room at the inn for travelers heading to Cuba — and
that was even before the winter high season really cranked up.

Through the summer, big events such as the official reopening of the
U.S. Embassy in Havana and Pope Francis' September visit to the island
gobbled up hotel rooms. But accommodations still remain in short supply,
especially in Havana.

"It's incredibly challenging. We hired someone just to liaison with the
hotels in Cuba," said Collin Laverty, president of Washington-based Cuba
Educational Travel, which books trips to Cuba for top American business
executives and cultural figures, as well as pre-packaged
people-to-people tours. All his people-to-people trips are sold out for
the rest of the year. After a New Year's Eve tour sold out, he added
three more New Year's trips that also sold out.

When Tom Popper, the president of insightCuba, another Cuba tour
operator, had to make a spur-of-the-moment trip to Cuba recently, he
couldn't even find a room at the Havana hotel chain where he has been
putting his people-to-people customers for years. He ended up staying
with a friend.

May through August is usually the off-season for Cuba travel, but Popper
said the only slowdown he saw this year was during a single week in
August. "There's a new normal," he said.

Bob Guild, vice president of New Jersey-based Marazul Charters, agrees.
The winter high season in Cuba, he said, used to be Nov. 1 to April 30,
but now it's more like Oct. 1 to May 31.

Cuba travel has taken off since President Barack Obama and Cuban leader
Raúl Castro announced a rapprochement between the two countries last
December and the United States introduced new travel regulations, which
still are restrictive but make it easier for more Americans to visit the
island. Around 91,000 American travelers visited Cuba in 2014. In the
first five months of this year, José Luis Perelló Cabrera, an economist
on the University of Havana's tourism faculty, estimates there were
51,000 American visitors, up from 37,000 in the first five months of 2014.

But it's not just increasing American travel that is squeezing the
availability of hotel rooms. Through September, 2.595 million
international visitors came to Cuba for overnight stays — an 18 percent
increase over the first nine months of 2014, according to Cuba's
National Office of Statistics and Information. That puts Cuba within
easy striking distance of breaking the record of 3 million annual
international travelers set in 2014.

And those figures don't include family visits by the Cuban diaspora,
which number in the hundreds of thousands per year. Many of those
travelers, as well as those on people-to-people tours or other trips
authorized by the U.S. government, use Miami International Airport as
their hopping-off point to the island.

From January to September, 2,956 flights to various Cuban cities
departed from MIA. They carried 307,323 passengers, an increase of 31.1
percent over the first nine months of 2014.

But that's nothing compared to the increase Laverty has seen in his
business. "Bookings are certainly way up — more than 300 percent from
the same period last year," he said. "Our sales would be even higher if
we weren't spending 50 percent of our time finding hotel rooms."

The new regulations allow travelers in 12 specific categories —
including people-to-people tours, humanitarian and religious missions
and travelers doing professional research — to visit Cuba without
seeking prior approval from Treasury's Office of Foreign Assets Control
and filling out reams of paperwork.

In September, another set of U.S. regulations that could further ease
travel to Cuba was released. Now U.S. travelers to Cuba will be allowed
to open Cuban bank accounts, and cruise and ferry lines no longer are
required to seek licenses from the United States to offer Cuban itineraries.

Laverty said the diversity of inquiries about Cuba also has increased in
recent months. He has heard from everyone from schools and artists to
oceanographers and doctors who want to attend medical conferences in
Cuba. There was also an uptick in American travelers who wanted to
attend the Nov. 2-7 Havana International Fair, Cuba's premier commercial
event, he said. He has arranged trips for business executives who just
want to test the waters and learn about potential possibilities in Cuba
as well as for those who want to put in formal proposals to the Cuban
government and meet with the appropriate ministers.

There's also interest from people who want to stage sporting events in
Cuba and entertainers who want to perform there. Mick Jagger and Katy
Perry were both recent visitors. Jay Z, Beyoncé, Rihanna, Usher and
Paris Hilton have been there as well. If stars choose to perform in
Cuba, Laverty said he expects U.S. tour operators will offer travel
experiences related to those performances. Such activities are permitted
under the new rules.

Cuba has an inventory of 63,000 hotel rooms, but many of the
people-to-people tours concentrate on Havana — where the shortage is
most acute. Cuba's tourism development plan calls for adding more than
13,600 new hotel rooms, mostly in beach areas, in 2016.

Airbnb's launch in Cuba last April has taken a bit of the pressure off
the hotels. The online booking service has assembled more than 2,000
listings for in-home stays in Cuba.

In response to the tight supply of hotel rooms, Cuba has raised prices.
During the pope's visit, a single room in need of updating at the Hotel
Nacional cost around $300 a night. Suites at the Saratoga, rated one of
the best hotels in Havana, range from $504 for double occupancy to $744
for the corner Capitolio suite with a sitting room and a claw-foot tub.
But there's no availability for that suite until April, according to the
Saratoga's website.

"Prices are spiking," said Popper. As travelers flooded into Cuba in
February, he said, Cuba's Ministry of Tourism said hotels needed to
raise their prices. Starting in April and through the summer, hotels
began increasing their prices on average 30 to 50 percent, Popper said.

"It's uncommon to change prices mid-season, but these are extraordinary
times. We all had to eat the price increases for the second half of
2015. There was no arguing with them," Popper said. "They're just trying
to cool down demand," as they look for investment in hotel projects,
mostly outside Havana, he said.

"I think that pricing is a challenge [for the Cuban government]. There's
a lot of demand and a limited supply, but at the same time Cuba has had
a problem getting return visitors," Laverty said. If travelers don't
perceive they're getting a good value, he said, they may give negative
feedback to their friends.

But Cuba is such a unique destination at this point, he said, "that most
people don't go for the hotel experiences; they want the culture. They
are almost never at their hotels."

Right now, Cuba has a forbidden-fruit, bucket-list cachet going for it.
That was the appeal for first-time Cuba traveler Henry Idica, a retired
X-Ray technician from Sacramento, California, who recently traveled to
Cuba for a nine-day trip with Boston-based Road Scholar that took his
group to Santa Clara, Trinidad, Cienfuegos and Havana. "I've always been
interested in seeing what Cuba looked like — mainly I wanted to see what
it looked like before McDonald's moved in," he said.

As she relaxed on the patio of the Hotel Nacional with fellow tour
members, Nancy Wagle, of Waverly, Ohio, said her goal was "to come
before Walmart."

Then Idica's wife Pat piped up, "I wanted to come before Starbucks."

The high point of her trip, Wagle said, was doing the cha-cha-cha with
the Cienfuegos Chamber Orchestra. But she said her desire to get to know
Cubans was limited by the language barrier.

Her traveling companion, Kitty Neely, who also lives in Waverly, said
she was struck by the poverty in Cuba as well as the feeling of security
and that her purse was safe. "For an American coming from the United
States, the poverty is unbelievable," she said, "but here I haven't felt
unsafe."

"I've virtually been around the world at least once and I've never been
to Cuba," said Jessica Cossaboom, a retiree from Central Florida who
signed up for the Road Scholar tour after the president's December
announcement. "I remember my parents talking about visiting Cuba," she said.

The quest to see the island before it's overrun by Americans also has
motivated Canadians and other international travelers, according to
travel experts.

Currently American arrivals pale in comparison to the number of Canadian
visitors, who numbered 1.175 million last year and represented Cuba's
top international market. Through September, around 1 million Canadians
visited, a nearly 14 percent increase over the first nine months of 2014.

After crossing Cuba off their bucket lists, will American travelers return?

"I'd come back in a minute," said Pat Idica. "It's one of our closest
neighbors, and we definitely should be able to travel here freely."

"The Americans [who don't visit Cuba] are missing a lot," said her
husband Henry.

For Boston-based Road Scholar, which arranges educational and
experiential travel to 150 countries around the world, Cuba is its
fastest-growing market. "It's been an amazing journey for us," said
JoAnn Bell, senior vice president of programs.

Back in the early 2000s when Road Scholar was known as Elderhostel, it
was one of the people-to-people tour pioneers, taking 100 to 200 people
to Cuba annually. But the Bush administration cut off such trips in 2003
as a way to shore up the embargo. In 2011, Obama restored the trips,
which are supposed to be purposeful travel that encourages contact with
ordinary Cubans and the free flow of information, and Road Scholar once
again got a people-to-people license.

After 2011, Road Scholar took about 1,500 to 2,000 travelers to Cuba
each year. But the new rules last December really opened the floodgates,
Bell said. This year the nonprofit educational travel program expects to
take 4,000 travelers to Cuba and it already has 3,000 bookings for 2016.
"We don't ever see that kind of growth," she said.

Bell also said Road Scholar is finding it difficult to secure hotel
space with the explosion in Cuba travel. To relieve some of that
pressure, one of its trips offers two nights in casas particulares,
private Cuban bed and breakfasts, and it is planning two cruise
offerings to Cuba in 2016.

Sonia Laguna, who launched Miami-based Just 90 Miles, a Cuba tour
company, in April after being inspired by Obama's December announcement,
has another way of getting around the high hotel prices and the lack of
availability. She has rented four houses, which have a total of 20
bedrooms, in Miramar for her small-group tours, and she has booked most
of her travelers' meals at private restaurants. "I offer a very
personalized service; it's not the hotel experience," said Laguna, a
Cuban who spent most of her adult life in Chile

Curiosity about the Cuba she knew as a child prompted her to return to
the island six times this year, and the desire to share the best of
Cuban culture, food, music and life led to her new business. Bypassing
the hotels also has helped her keep her prices lower. A six-day trip,
for example, costs $2,250 — quite a bit less than some of her
competitors charge.

"I'm just a small operator trying to be in a business that is the future
of Cuba: tourism," Laguna said.

The president's Dec. 17 announcement also prompted Popper to take
action. That same afternoon, he submitted his requests for additional
rooms needed to accommodate his 2016 and 2017 tours. Fifteen years of
working with Cuban hotels and his foresight paid off. He got all his
room requests.

This year, insightCuba offered 170 departures to Cuba and expects to
take 3,500 U.S. travelers to the island. Next year, it plans 200
departures for 5,000 visitors, and the New Rochelle, New York, company
has hired an additional 15 people to keep up with the Cuba business.

In the face of surging demand, hotels also have renegotiated reservation
and cancellation policies, Laverty said.

Many hotels used to allow cancellations with 24-hour advance notice. Now
Laverty said the Meliá hotels in Havana are asking for preliminary
rooming lists, complete with names and passport numbers, to be submitted
90 days before the group travels, and a final rooming list 60 days
before. Although he said there is a bit of leeway, most changes after
that date are penalized.

Mimi Whitefield on Twitter: @HeraldMimi

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