Friday, August 26, 2011

A & K and Globus Not Giving Up


Globus and A&K are working to restore their 2012 Cuba tours after a U.S. government clampdown forced the operators to pull their people-to-people tours from the market just days after announcing them.

The U.S. Office of Foreign Assets Control slammed tour operators for launching Cuba programs after the Globus and A&K announcements received wide coverage, including in the consumer press.

On July 25, the Office of Foreign Assets Control (OFAC) issued a travel advisory citing “misstatements in the media suggesting that U.S. foreign policy, as implemented by OFAC, now allows for virtually unrestricted group travel to Cuba.” The advisory noted that only OFAC-authorized “travel service providers” are permitted to operate people-to-people group trips.

Operators: ‘We complied’Both Globus and A&K said their programs complied with OFAC’s guidelines for people-to-people programs and religious group travel.

“We were above board on everything,” said Globus’ Mike A. Schields, managing director, groups and emerging markets.

Licensed travel service providers for Cuba must certify that “all participants will have a full-time schedule of educational exchange activities that will result in meaningful interaction between the travelers and individuals in Cuba,” according to the OFAC. “Tourist activities” are not authorized activities, the advisory stated.

Trip operators are permitted to contract with OFAC-authorized providers.

Guidelines not clearIndustry members thought they understood what was permissible after regulations were relaxed in January, but the July 25 advisory has muddled the picture, Paul Ruden, ASTA’s senior vice president for legal and industry affairs, told Travel Market Report.
Paul Ruden
“Hopefully, there will be additional guidance in the near future that will more precisely define what types of activities are permitted and not permitted under the new regulations,” Ruden said.

ASTA has not published guidelines for travel agents regarding travel to Cuba, he added.

Payment processing an issue
At Globus, “what really threw a wrinkle” into its Cuba plans was OFAC’s rule stipulating that travel agents and tour operators that don’t hold a license cannot collect funds, Schields told Travel Market Report.

“The real problem is that most of the travel service providers that hold the licenses are small operations – one or two people – that cannot process payments” in the volume the Globus program would generate, said Schields.
Serious about religious toursGlobus was planning a religious program to Cuba. “Since Globus has had a religious travel division for many years, we were uniquely qualified to offer these programs. We are still pursuing this,” Schields said. “We look forward to the day when the licenses are cleared.”

Globus is serious about its religious tours – they are not just pro-forma to comply with OFAC rules, Schields said.

Globus had partnered with the Center for Caribbean Religion & Culture to offer an itinerary focused on the religious history of Cuba.

Abercrombie & Kent partnered with the Foundation for Caribbean Studies to create an itinerary that focuses on Cuba’s economic development, specifically as it relates to agriculture.

The operator is waiting for the OFAC to provide further clarity on its latest advisory regarding authorized travel to Cuba, an A&K spokesperson said.

Preferential treatment for Florida firms?Meanwhile, a leading advocate for lifting restrictions on U.S. travel to Cuba has accused the Obama Administration of giving preferential treatment to the mostly Florida-based companies that have been authorized as travel service providers for Cuba.

“Travel agents need to push the White House to end discriminatory treatment by doing away with the special status of mostly Florida travel service providers,” said John McAuliff, executive director of the Fund for Reconciliation and Development. McAuliff’s group is a not-for-profit organization that advocates normalizing relations with Cuba, Cambodia and Laos.

Politics at play
The OFAC’s Cuba travel advisory was probably political, said McAuliff, echoing the opinion of several tour executives who spoke on condition of anonymity. Cuban-American Sen. Robert Menendez (D-N.J.) is opposed to lifting travel restrictions to Cuba and he wields considerable power, they noted.

The Cuban political establishment in South Florida, which is important to President Obama’s re-election, is also vocal in its opposition to lifting the restrictions.

Menendez issued a scathing statement attacking the administration’s easing of Cuba travel restrictions in January. Menendez is chairman of the Senate Foreign Relations Committee’s Subcommittee on the Western Hemisphere.

Pessimistic on Cuba travel
One tour operator licensed to provide religious programs to Cuba, Ya’lla Tours, is not optimistic about free travel to Cuba.

“I don’t think there will be free travel to Cuba,” said Ronen Paldi, president of Ya’lla Tours. “It means Congress has to change the law, and I do not see that happening.

“The saddest thing is that if the purpose of embargo was to get rid of Castro, it  has failed. After 52 years, maybe we should try some other means of influencing Cuba.”

‘Great opportunity’Schields called Cuba a great opportunity for the tour industry and for travel agents. He described the destination as unspoiled and uniquely interesting – “a Galapagos of people.”
More than a half-million Cuban-Americans visited the Caribbean nation in 2010, according to Paldi.

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