Thursday, September 8, 2011

Opportunities for Travel Professionals

President Obama’s announcement in January of “purposeful travel” has been implemented with excruciating slowness and caution.  Less than sixty license applications have been granted.  The Office of Foreign Assets Control (OFAC) has not provided straight forward ways for the travel industry to become involved.  The most ambitious tour operators, Abercrombie and Kent and Globus, were forced to withdraw their programs because of unnecessarily narrow interpretation of regulations, presumably a response to political pressure. 

The companies mistakenly believed that they could simply partner with an organization that had a people to people license and then function in a normal business model with travel agents selling their packages.  The language of their promotional materials, and its public interpretation by local agents and travel writers unfortunately sounded more touristic than their actual programs.

This allowed hard line Cuban American Representatives and Senators who despise all travel to successfully pressure the White House, the State Department and the Office of Foreign Assets Control (OFAC).  These same members are trying legislatively to roll back all of the President’s reforms, including even his earlier and more far-reaching opening for Cuban Americans.

Nevertheless, people to people travel is going forward under the auspices of not for profit organizations listed below.  The first such trip, sponsored by Insight Cuba, has received much favorable coverage.   

Is There An Opportunity to Sell Cuba? 

People to People (P2P) licensees cannot pay conventional commissions to travel agents, but may be able to offer 10% referral fees. 

(See report on fees from National Geographic Expeditions in the blog Travel Agent )

A referral fee can definitely be offered by Travel Service Providers (TSP), the 250 companies licensed to sell air tickets, accommodations and programs, or by any third country provider.

What business opportunity does this offer to a brick and mortar or home based agent?

1)      You can refer clients to a P2P licensee that is offering open enrollment trips.

2)      You can assemble an affinity group among your clients and work with a P2P
          licensee to select or create an appropriate program.  (One example of how that
          is done )

3)     You can assist a group that qualifies for a general license to arrange their  
         program through a Travel Service Provider.

a)      Work with a college or university in your community to create a for-credit    mini course that takes students and teachers to Cuba during an intersession, spring break or summer vacation.  (If you have or obtain status as a part time staff member or adjunct faculty, it is also possible to make an advance preparatory trip.)

b)            Work with any kind or level of religious organization that wants to send its
members to Cuba for a program of religiously oriented activities

What OFAC says you cannot do

“OFAC only licenses People-to-People Groups that 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.  Authorized activities by People-to-People Groups are not “tourist activities” under the Trade Sanctions Reform and Export Enhancement Act of 2000, which prohibits OFAC from licensing travel-related transactions for tourist activities….

A People-to-People Group using another entity to make its travel arrangements may only use an OFAC-authorized Travel Service Provider* or an entity outside the United States that is not subject to U.S. jurisdiction.  Travel agents and tour operators in the United States that do not hold an OFAC Travel Service Provider authorization cannot organize trips, collect funds, make travel arrangements, or engage in any other Cuba travel-related transactions for People-to-People Groups or any other licensed travelers.”

Guidelines for licenses

Open Enrollment Trips

The following organizations have received people to people licenses and are offering trips that are available to anyone who wishes to participate in a serious group encounter with Cuba and its people.

Insight Cuba

National Geographic Expeditions

Road Scholar (formerly Elderhostel)

The Center for the Study of Cuban Culture + Economy

Witness for Peace

Application pending approval

Center for Cuban Studies

Fund for Reconciliation and Development

Travel Service Providers

No comments:

Post a Comment