New restrictions poised to block travel and trade with Cuba

El Gran Hotel Manzana Kempinski La Habana, Havana, Cuba
El Gran Hotel Manzana Kempinski La Habana, Havana, Cuba

In Florida, a state with a large community of Cuban refugees and their descendants, President Donald Trump announced a plan that will both tighten rules on Americans traveling to Cuba and “significantly restrict” U.S. companies from doing business with local companies in the island country that are controlled by the military, senior White House officials told Reuters. The plan aims to prevent U.S. dollars from being used to fund what the new U.S. administration sees as “a repressive military-dominated government.”

"They made a deal with a government that spread violence and instability in the region and nothing they got, think about it, nothing they got, they fought for everything and we just didn't fight hard enough, but now, those days are over," Trump said on Friday, referring to Barack Obama’s relaxing of the bans in 2014. "We now hold the cards. The previous administration's easing of restrictions of travel and trade does not help the Cuban people. They only enrich the Cuban regime."
 
The restrictions follow Trump’s campaign promises to more strictly enforce the embargo on U.S. relations with Cuba. In the wake of the détente, travel to Cuba skyrocketed. According to the Washington Post, approximately 4 million visitors traveled to Cuba last year, including 614,000 Americans and Cuban Americans, a 34 percent increase over 2015, Cuban tourism ministry data shows. Boston Consulting Group, a research consultancy, projected the island could see up to 2 million American travelers by 2025.


 
At last year’s South American Hotel Investment Conference, Cuba’s Vice Minister of Tourism Luis Miguel Diaz Sanchez said that tourism to Cuba grew 17 percent last year and occupancy was at 62 percent, although occupancy rates vary by season. Officially, Cuba currently has 16,000 existing hotel rooms and another 6,000 rooms in private homes that are available to rent on Airbnb and local platforms. “It’s no secret to anyone that there will be more inflow from the U.S. and we expect that to be gradual and have been getting ready by improving infrastructure in order to meet the needs of this new demand, but we don’t want to destroy the quality of the country,” he said at the time.

The influx of visitors boosted appeal for further investment. By last summer, Marriott had become the first U.S.-based hotel company to open a property in Cuba in more than 50 years, and other international brands were looking to gain a foothold as well. 

Four Points by Sheraton Havana

Restricted Travel & Trade 

But while Trump said he was "completely" canceling Obama's Cuba policy, the actual changes are only partial. Under the new travel policy, Americans traveling to Cuba will face “tighter enforcement” to make sure they completely fit the 12 authorized categories under which citizens can legally visit the communist country. U.S. visitors would not be able to stay in any hotel connected to the Cuban military—including the Four Points by Sheraton in Havana, which opened as part of a JV with Grupo de Turismo Gaviota S.A., one of the oldest military-run organizations in Cuba.  
 
The new policy will also ban most U.S. business deals with the Armed Forces Business Enterprises Group (GAESA), a “sprawling conglomerate” that is involved in all sectors of the economy.  

Reasons for Hope 

But it may not be all bad. The plan would make exceptions related to air and sea travel, protecting the U.S. airlines and cruise lines that travel directly to Cuba. The restrictions would also not require the countries’ embassies to close, and would not end the diplomatic relations restored in 2015. 
 
One official told Reuters that the administration does not intend to “disrupt” existing business deals—like Marriott’s planned growth in the country.

Responses

Arne Sorenson, Marriott’s president and chief executive, issued a statement saying it would be “exceedingly disappointing to see the progress that has been made in the last two years halted and reversed by the administration.” 

The company, he said, has “invested significant resources establishing a presence in Cuba, and with one hotel open and another in the pipeline, we have just begun our work creating opportunity and a more vibrant tourism sector on the island.”
 
“We urge the Trump administration to recognize and utilize travel as a strategic tool in its efforts to improve relations with Cuba, allowing us to be part of a promising future, as opposed to reverting to the policies of the past,” Sorenson said.
 
In an opinion piece for The Nation, Peter Kornbluh wrote:

“In both tone and substance, Trump’s new policy will undercut the Obama administration’s meticulous efforts to open a new era of civil and respectful bilateral relations between Washington and Havana. By resurrecting the decades of perpetual hostility that dominated the US approach to the Cuban revolution until December 17, 2014—the day Obama and Raúl Castro announced an agreement to reestablish diplomatic ties—Trump is set to sabotage a historic foreign-policy achievement that has indisputably advanced US national and international interests, and contributed significantly to major socioeconomic changes on the island.”

James Williams, president of Engage Cuba, also released the a statement on the planned restrictions:

"This policy was clearly written by people who have never been to Cuba, at least not in this century. Because if they had, they'd know that the only thing that restricting travel will do is devastate Cubans working in the private sector who have relied on American visitors to provide for their families.
 
"The idea that after 55 years of failure, going back to isolationist policies will produce any results is insane.
 
"This policy is not only a betrayal of President Trump's "America First" agenda and of his
campaign promise to remove job-killing regulations, but will be a huge blow to the Cuban people who will suffer as a result.
 
"It's a shame that President Trump listened to two hardline members of Congress instead of the majority of his Republican base, the majority of the American people and almost every single Cuban on the island. 
 
"This is bad policy, bad politics and bad for U.S. business."

 

And in The Atlantic, Ben Rhodes explained why the restrictions would hurt both American businesses and the Cuban people: 

Despite rhetoric about supporting Cuban entrepreneurs, any reduction in travel is going to hit them—common sense suggests that someone who stays at a military-owned hotel will also ride in taxis, eat in restaurants, and shop at stores owned by ordinary Cubans. Those are the Cubans that Trump is hurting—not hotel owners who will still welcome tourists other countries.