Cuban hotels dropping Brits in favour of US firms
12 May 2016
BY Patrick Whyte
Hotels in Cuba are breaking contracts with UK holiday companies following the opening up of the island to US visitors, according to a travel lawyer.
Ian Skuse, a partner at Blake Morgan, told the Abta Travel Law Seminar that some of his clients had already been affected by Cuban hoteliers trying to get out of their contracts so they could sign deals with US firms.
“Cuba accommodation contracts are being broken because the Americans are paying more money,” he said. “Whether this is going to become a theme, we just don’t know yet. It’s supply and demand – they can get more money elsewhere.”
The “normalisation” of relations between the US and Cuba now allows US citizens to visit the Caribbean island for 12 specified different purposes, although these categories do not include tourism.
But the seminar heard that these travel restrictions were “very easy” to get around and US citizens could now visit Cuba if they wished, which was creating a “free for all” situation.
Neil Baylis, a partner at K&L Gates, said that US authorities were set to allow 110 daily scheduled flights to operate from the US to Cuba.
US-based airlines have submitted applications to the Department of Transportation to be allowed to run some of these services, which will include 20 daily flights to the capital Havana.
Iran is also set to grow as a destination following the lifting of sanctions with British Airways among the airlines due to resume flights to the country this year. Iran hopes to grow tourism arrivals from 5 million a year to 20 million by 2025.
European and Canadian tourists have benefited for years from lower prices in Cuba. The opening of a more normal US market will naturally increase competitive costs. That will be most dramatic when Congress ends travel restrictions completely and all inclusive resort hotels will become available to Americans for the first time.
Are the Cubans breaking contracts or simply not renewing them at old rates?
For Americans that have faced price increments by charter carriers and US tour operators, more normal transportation and booking processes may lead to lower total costs.
Fund for Reconciliation and Development