Sunday, July 23, 2017

New Organization of Tour Operators for Defense Against Trump

U.S. Cuba tour operators gird for Trump travel crackdown

Marc Frank and Sophia Kunthara

HAVANA/NEW YORK (Reuters) - U.S. tour operators that send Americans to Cuba are banding together to try to limit damage to business from tighter restrictions on travel to the communist-run island expected in September from the Trump administration.

U.S. President Donald Trump in June rolled back parts of Barack Obama's historic opening to Cuba, saying his predecessor negotiated a “terrible and misguided deal.”

The revised approach includes stricter enforcement of a longtime ban on Americans going to Cuba as tourists. Among changes are limiting visits to 12 existing categories of non-tourist travel and a ban on the use of hotels and other facilities owned by Cuba's military.

Cruise ships are permitted, the administration said, but not independent visits by solo travelers and families under the popular people-to-people travel category which Trump charged was being used to violate the tourist ban.

Many Americans took Trump's message to mean travel to Cuba, except on cruise ships, was again off limits, U.S. tour operators said. It is a misconception they hope to change with a trade group formed in the last month to influence the debate on Cuba and help would-be visitors navigate new rules.

“We need to share information and speak as a united voice on issues that are important to us,” said Cuba Cultural Travel's Michael Sykes, who founded the group American Tour Operators in Cuba (ATOC) that now counts more than 30 U.S. companies.

"Pall" Over Cuba

Trump's move to roll back Obama policies introduced after the 2014 U.S.-Cuban detente has yet to have a significant impact on the number of U.S. travelers visiting the island, according to a survey of a dozen U.S. tour operators by Reuters.

But travel companies fear a hit on future demand from Trump's combative tone and regulations, with some concerned it could even spook U.S. banks that help them do business with Cuba.

“We can work with the new rules with minimal changes, but a pall has been cast over the business and that has me worried going forward,” said Steven Cox, president of Alabama-based tour operator International Expeditions, an ATOC member.

    “Many American travelers are not so well informed and believe that travel to Cuba is being shut off and that just isn’t true,” he added.

Some 300,000 Americans, excluding those of Cuban descent, visited Cuba in the first six months of 2017, more than twice last year's number during the same period, according to the Cuban government. Of those, 40,000 traveled outside organized groups using online booking, tour companies estimated, the majority under the people-to-people category.

Operators said they had been inundated with inquiries from clients worried about future travel and are revising itineraries to avoid Cuban hotels operated by the military.

“We are receiving requests from a lot of small groups, families, couples’ trips, birthday parties and the like, that were already planning on going to Cuba but don’t know what to make of the new rules and how to ensure they are in compliance,” said Collin Laverty, who runs Cuba Educational Travel, another member of the trade group.

Priceline Group Inc (PCLN.O), which agreed in March 2016 to make hotel rooms in Cuba available to U.S. customers through its subsidiary, is still taking reservations "within the allowable guidelines and categories," spokeswoman Leslie Cafferty said in an emailed statement.

Online travel agent Expedia Inc (EXPE.O) declined to comment.

Airlines and Banks

Janet Moore, owner of California-based operator Distant Horizons, said new rules could make it difficult for individual travelers to visit Cuba and force airlines to cancel flights, making her tour scheduling more complicated.

Carriers such as American Airlines Group Inc (AAL.O) announced moves late last year to cut the frequency of Cuba flights as demand lagged initially high expectations.

Moore also expressed concern about transferring payments to Cuba.

The trade embargo has always made U.S. banks nervous they could be held responsible if a client was not operating within Treasury Department rules.

Operators said a more hostile Trump administration might raise pressure on banks to ensure clients were in compliance and increase the number of regulations they had to check.

    "What concerns me is if the regulations become even more complicated, the banks are going to be really, really holding on and making sure everything's legitimate. And they may decide 'this isn't worth it to us,'" Moore said.

Reporting by Marc Frank; Editing by Andrew Hay

Saturday, July 22, 2017

Scaramucci Pro-engagement

New White House communications director has traveled to Cuba to scout investment opportunities

Anthony Scaramucci, the new White House communications director, has traveled to Cuba several times to explore the possibility of doing business on the island.
Scaramucci, whose appointment on Friday led to the resignation of White House Press Secretary Sean Spicer, is the founder of the global investment firm SkyBridge Capital. He also is behind the annual SkyBridge Alternatives (SALT) Conference that brings together business and government leaders. In 2016, the conference — for the first time —included a panel on Cuba in which the Cuban-American businessman Hugo Cancio was one of the speakers.
At the offices of OnCuba in Havana, a digital media outlet owned by Cancio, Scaramucci was quoted in an interview published in May 2016 about his idea of ​​creating an investment fund for Cuba, adding that, we are eager to exchange (ideas)... about the best ways in which we can contribute to the development of the country, the services and the quality of life of citizens.”
Scaramucci told OnCuba that he first traveled to the island in 2012.
“When I saw that the U.S. policy of rapprochement was heading to reconciliation and the ease of the embargo, I started to get in touch with people to get an idea of whether it was really possible to implement my projects here,” he said

On his Facebook page, Scaramucci shared the interview on a May 4, 2016 post and wrote that during his visit to Cuba he "saw a very beautiful country. I am very hopeful for the future of Cuba and excited to welcome the Cubans to the SALT Conference!”

The White House did not immediately respond to a request for comment.
Cancio confirmed that Scaramucci is “a good friend.
“He is a very successful businessman and I hope his new vision will be good for the White House and President Donald Trump,” Cancio said.
Trump recently took steps to tighten U.S. policy toward Cuba and ban business with companies linked to the Cuban military, which controls most of the Cuban economy. It also imposed some limitations on individual travel by Americans to the island and ordered more audits for travelers. However, he did not entirely undo all of the easing of restrictions implemented by former President Obama.
Before taking a harder approach on Cuba, several media outlets, including NewsweekBloomberg and the Miami Herald reported the Trump Organization’s interest in doing business with Cuba, even though the U.S. embargo prohibits it.
“I think the situation is oversimplified to one country being capitalist and the Cuban system originating from communism, and as a consequence, there’s an embargo,” Scaramucci said in the interview. “However I think that many Americans would like to get in touch with Cuba and its culture.”
“I have always said that to speak and give an opinion about Cuba, people should travel to the island and be in contact with all kinds of Cubans,” said Cancio, who has served as an adviser for several U.S. companies interested in business on the island. “Anthony has had that opportunity and I hope he can be a new, more calm and coherent voice about Cuba's past and present.”
“Today I sleep more calmly that there is a person close to Trump who can share that vision stemming from the experience on his visits to Cuba,” he added.

Saturday, July 15, 2017

Annotated "Fact" Sheet from the Trump Administration

Fact Sheet on Cuba Policy

President Donald J. Trump is changing the policy of the United States toward Cuba to achieve four objectives:

1.      Enhance compliance with United States law—in particular the provisions that govern the embargo of Cuba and the ban on tourism;
2.      Hold the Cuban regime accountable for oppression and human rights abuses ignored under the Obama policy;
3.      Further the national security and foreign policy interests of the United States and those of the Cuban people; and
4.      Lay the groundwork for empowering the Cuban people to develop greater economic and political liberty.

Summary of Key Policy Changes:

·        The new policy channels economic activities away from the Cuban military monopoly, Grupo de Administración Empresarial (GAESA), including most travel-related transactions, while allowing American individuals and entities to develop economic ties to the private, small business sector in Cuba. The new policy makes clear that the primary obstacle to the Cuban people’s prosperity and economic freedom is the Cuban military’s practice of controlling virtually every profitable sector of the economy. President Trump’s policy changes will encourage American commerce with free Cuban businesses and pressure the Cuban government to allow the Cuban people to expand the private sector.

·        The policy enhances travel restrictions to better enforce the statutory ban on United States tourism to Cuba. Among other changes, travel for non-academic educational purposes will be limited to group travel. The self-directed, individual travel permitted by the Obama administration will be prohibited. Cuban-Americans will be able to continue to visit their family in Cuba and send them remittances.

A complete contradiction.  Group travel must go through official Cuban channels and requires use of hotels, some of which are GAESA linked.  Individual P2P travel was the primary source of funding for “the private, small business sector in Cuba”.

·        The policy reaffirms the United States statutory embargo of Cuba and opposes calls in the United Nations and other international forums for its termination. The policy also mandates regular reporting on Cuba’s progress—if any—toward greater political and economic freedom.

Once again the US will be completely isolated and embarrassed in the UN and other international forums.

·        The policy clarifies that any further improvements in the United States-Cuba relationship will depend entirely on the Cuban government’s willingness to improve the lives of the Cuban people, including through promoting the rule of law, respecting human rights, and taking concrete steps to foster political and economic freedoms.

No such requirements were made of China or Vietnam, nor for Saudi Arabia and Egypt.

·        The policy memorandum directs the Treasury and Commerce Departments to begin the process of issuing new regulations within 30 days. The policy changes will not take effect until those Departments have finalized their new regulations, a process that may take several months. The Treasury Department has issued Q&As that provide additional detail on the impact of the policy changes on American travelers and businesses.

For more information on this policy see the below links to the relevant United States Government Departments: Department of CommerceDepartment of StateDepartment of TreasuryDepartment of Homeland Security, and the Department of Transportation.

Washington Post Analysis of Counterproductive Trump Policy

Trump’s Cuba policy tries to redefine ‘good’ U.S. tourism. That includes putting visitors back on tour buses. 

Trump's new Cuba policy, explained

By Nick Miroff June 17

The American traveler in Cuba — sweating, disoriented and probably a bit woozy from the rum drinks — is once more at the heart of the struggle for the island’s future.

Central to President Trump’s plans to peel back his predecessor’s detente with Cuba is the idea that there is “good” and “bad” U.S. travel. The United States, Trump believes, can tightly regulate American vacations to deprive the Castro government of dollars and redirect the money to the island’s growing class of entrepreneurs.

But it will be difficult to pick winners in Cuba’s state-controlled economy, where government businesses and the private sector are thoroughly intertwined. And even harder will be determining what sort of travel constitutes the kind of “people-to-people” interactions the Trump administration says it wants to preserve.

By reinstating restrictions on independent travelers, the Trump administration’s new policy will hurt Cuba’s emerging private sector that caters to American visitors, critics insist.

Instead, the new rules will herd Americans back toward the kind of prepackaged, predictable group tourism that the Cuban government actually prefers — and earns more revenue from.

“I think if you come here on a package tour, you see what the Cuban government wants you to see,” said Andrew Sleyko, 36, a food scientist from Chicago who was visiting the island for the first time as Trump announced his new policy.

Sleyko and a friend had booked rooms through Airbnb and were spending their days walking around the city in the muggy heat.

“We’re talking to people wherever we go,” he said. “Isn’t that the idea of people-to-people?”
[What’s changing and what’s not with Trump’s new Cuba policy]

The Trump plan, announced Friday in Miami’s Little Havana neighborhood, asserts that the Obama-era rules facilitated what the White House called “illegal” tourism as more U.S. travelers booked their own trips by renting rooms in Cuban homes through sites such as Airbnb.

While the law still allows certain American travelers to visit as individuals for religious, professional or other purposes, it eliminates the “individual educational” category that quickly became the most popular way to go to Cuba without booking a group tour.

Americans will generally still be allowed to visit Cuba if they come on cruise ships, for instance, or book with U.S.-approved tour agencies that ensure travel itineraries do not include too much unstructured time.

The complication for Trump’s rules, however, is that large tour groups are too big for smaller bed-and-breakfast rentals, and their government-appointed guides tend to ply the well-trodden routes that bypass the new galleries, restaurants and night spots opened by enterprising Cubans and others after the openings spurred by Obama.

That, in turn, will cause a ripple effect.

“If independent American travel is cut off, you won’t only hurt the bed-and-breakfasts. It’s also the construction crews, the private tour guides, the taxi drivers, the restaurants and the artists selling handicrafts,” said Andrea Gallina, an Italian entrepreneur who last year opened a high-end boutique hotel, Paseo 206, with his Cuban spouse.

The 1934 mansion has an Italian restaurant on the ground floor, and Gallina estimates two-thirds of his guests are American, booking rooms through Airbnb, Expedia and other U.S. sites.

“To be honest, Americans don’t have time to go to the beach, because they get absorbed into the city,” he said. “Independent travelers have more contact with real Cubans.”

Gallina employs 22 Cuban workers. If his bookings decline because of a travel crackdown, he said, he will probably turn to the European market and “tighten our belts.”

American travel to Cuba has been a political battleground since the early 1990s, when the collapse of the Soviet Union left the island’s communist government starved for hard currency.

[With Cuba shift, Trump could undercut his company’s hotel rivals]

As its resort industry grew and more foreign visitors arrived, the Castro government’s enemies in Miami and in the halls of Congress fought to restrict Americans from going — knowing their dollars could undermine efforts to choke the Cuban economy.

Instead, Cuba’s tourism industry grew on euros and Canadian dollars.

But that’s beginning to change.

The government says it received more than 4 million tourists last year — a record number — of which about 615,000 were U.S. visitors. That includes 330,000 Cuban Americans visiting relatives on the island, but many of the rest were Americans taking advantage of Obama’s landmark moves to restore diplomatic ties with Cuba.

Travel by non-Cuban Americans has been on pace to double this year, according to the latest government data.

But Trump’s rollback is expected to put a brake on that growth. U.S. officials say the new restrictions have yet to be written and will not take effect until then, and Americans who have already booked Cuba travel won’t have to cancel.

Limited economic reforms by Cuban leader Raúl Castro, 86, have allowed Cuban entrepreneurs to buy and sell property and run small businesses, but it was Obama’s normalization measures that kicked the process into overdrive.

In Old Havana’s tourist quarter, entire city blocks of crumbling century-old buildings are being renovated and turned into boutique hostels and chic cafes.

The work is being almost entirely carried out by private sector tradesman and contractors.

“I’ve never been this busy,” said Roberto Claro, a dust-covered construction foreman in Old Havana, whose crew was busy converting a ruined, century-old building into a seafood restaurant. There were two other buildings on the same block also getting an overhaul.

The new rules aim to ban or limit Americans from patronizing military-linked businesses including Cuba’s gargantuan ­GAESA conglomerate, which is estimated to control more than half of the island’s tourist economy.

The U.S. Treasury Department’s Office of Foreign Assets Control said Friday it will provide Americans with a lists of prohibited hotels and other businesses linked to the company so American travelers can steer clear.

U.S. travelers will need to keep detailed records and receipts from their Cuba trips in case of an audit by Treasury Department officials, and that alone could be a deterrent if aggressively enforced.

“The real challenge in implementing will be this,” said Chris Sabatini, a lecturer at Columbia University’s School of International and Public Affairs and the director of the website Global Americans. “Monitoring travelers, evaluating who is staying in military-owned hotels, tracking license compliance — all that requires bureaucratic capacity and follow up.”

Because Treasury’s foreign assets division is the same office in charge of enforcing sanctions against countries such as Iran and North Korea, it has come under criticism for devoting resources to investigating the vacation receipts of American travelers who visit Cuba. A bipartisan Senate bill that would completely lift travel restrictions has 55 co-sponsors.

“You or I could travel to any country on the globe and there’s not a federal government prohibition from us doing so — the only restriction is Cuba,” Rep. Mark Sanford (R-S.C.) told CNN as Trump announced the new measures. “We’re not the Soviet Union. We don’t have to have ‘travel papers’ for the government to decide whether or not you can travel.”

Treasury said it will issue new guidelines in the coming months.

Gallina and others in Havana said they have been flooded with calls and emails from Americans in the past three days asking if they should cancel their trips.