Just as JetBlue and American Airlines launched their first flights into Cuba, and two days after the death of former Cuban president Fidel Castro, U.S. President-elect Donald Trump threatened in a tweet to reimpose sanctions on Cuba that had been lifted by the Obama administration.
If Cuba is unwilling to make a better deal for the Cuban people, the Cuban/American people and the U.S. as a whole, I will terminate deal.— Donald J. Trump (@realDonaldTrump) November 28, 2016
If Trump makes good on the threat, he could undo the progress President Barack Obama has made over the past two years in opening up Cuba to trade, tourism—and hotel investment.
According to the Guardian, some analysts said they did not expect Trump to rescind the executive orders that relaxed the half-century embargo on Cuba since Castro came to power, citing the pro-business lobby in the Republican party and Trump’s own commercial instincts.
While travel to and trade within Cuba is now easier than it has been since the embargo was first implemented in 1962, many restrictions remain in place and can only be removed by Congress. During the fight for presidential votes in Florida, 90 miles north of Cuba and home to many Cuban exiles, Trump and running mate Mike Pence promised to reverse the executive orders that eased relations with the island nation.
What Could Change?
As the Wall Street Journal noted, while Trump could undo Obama’s efforts, he could face pushback from U.S. companies that are now “deeply invested” in Cuba under the current administration’s policy. Those companies include major airlines, hotel operators and technology providers, while big U.S. phone carriers have signed roaming agreements on the island.
Most vulnerable are the regulations that allow U.S. companies to deal with Cuban state-owned entities—for example, the regulations that allowed Marriott (and, at the time, Starwood) to secure permission for the first American-owned hotels to open in Cuba in a half-century. Jeff Flaherty, a spokesman for Marriott International, which acquired Starwood in September, told the Journal that it was “premature to assess what effect a Trump administration would have on its business in Cuba.”
According to the State Department, 700,000 Americans visited Cuba in 2015, which officials said was an increase from previous years. The so-called people-to-people travel exemption allows Americans to visit Cuba without a tour group, and it could also be on the line.
At last month’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. “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.
And in spite of the delicate status of diplomatic relations between the two nations, U.S.-based travel and hospitality-related industries are still keen to gain a foothold in Havana. Last week, Apple Leisure Group CEO Alex Zozaya said that maintaining the embargo would be a “step backward” for Cuba, the CEO said. “I don’t know how we’ll do business there. I really hope the embargo will be lifted soon and we’re able to go there. The weather, the beaches, the culture, the location—it’s all great for the U.S.”
But maybe it's not all as bad as it seems. Peter Harrell, a former senior official at the State Department who worked on sanctions in the Obama administration, told the Journal that he expected the president-elect would “pull back some of that dealing with the Cuban state while allowing travel and private enterprise to go forward.” The President-elect, he told the Guardian, was “talking less about rolling back sanctions, as much as demanding things from Cuba to avoid rolling back.”