Cuba's Travel & Tourism Industry
The global travel market based on gross bookings (total value of the travel booked) was a US$1.4 trillion market in 2014. A total of 41% of this amount (US$575 billion) was the online travel market. The online travel industry in general is dominated by industry giants such as Priceline and Expedia who collectively own a majority of the brand travel and tourism websites. However, the market has shown that there is significant interest in niche travel companies that provide local tour and marketing support for travelers to explore local cultures and locations. A greater emphasis is also on “adventure tourism” including staying outside of major tourist resorts such as private residences and B&B locations. Smaller niche startups have successfully launched with geographic-specific travel support such as Jumai providing hotel and travel services in Nigeria, or with service specific sites such as CouchSurfer.com providing hosteling and home sharing services to travelers. Success of companies such as Airbnb and HomeAway (home rentals) as well as Uber and GrabTaxi (on demand car services) have also demonstrated viable business models that can be transposed across multiple geographic markets.
International visitors to Cuba reached 4 million in 2017 bringing in approximately US $3.6 billion in tourism revenue (source: CompassCayman.com). The majority of these travelers were Canadian, European and South/Central American. The travel and tourism industry in Cuba is somewhat restricted by the number of hotel beds available. The unique political and economic situation in Cuba has limited the growth potential for the tourism industry for many years. The Cuban government has controlled all aspects of the economy and capital has been limited thus inhibiting rapid expansion of the tourism industry. However, this is changing as Cuba and its government is starting to open up to a more capitalist economic system and are now allowing private businesses. There appears to be growing momentum for even more economic and democratic reforms which will open the growth potential of the Cuba tourism market further.
Already in 2017, American visits to Cuba were up over 50% to 1 million visitors and are expected to continue to grow to around 10 million people a year comprising a multi-billion dollar market assuming all travel restrictions are lifted (source: International Monetary Fund). It is important to note however that the 54 year old trade embargo imposed on Cuba by the U.S. prohibits most American companies from doing business with Cuba. This creates an opportunity in that a potentially multi-billion dollar market consisting of U.S. travelers going to Cuba will not be serviced by the bulk of U.S. travel companies. This significantly diminishes the U.S. competition until such a time the U.S. Congress votes to lift the trade embargo.Through the Cuba Ventures division, CUV Ventures Corp will continue to acquire and build important; media, travel and digital assets, all of which are neither domiciled nor doing business with the government of Cuba.The company anticipates that these “external” Cuba focused assets will, in the future, garner great interest from U.S companies looking to rapidly enter the Cuban market, as and when it is legal for U.S companies to do so, when the economic embargo is lifted.