Cuba continues to invest in tourism despite its contraction in 2024 (+Español)
Contrary to forecasts, Cuba closed 2024 with a contraction in the number of foreign visitors arriving in the country. This fuels the recurring question of whether so many resources should continue to be invested in the tourism sector.
According to a January report from the National Office of Statistics and Information (ONEI), last year, the Caribbean island nation welcomed 2.2 million international visitors, which represents 90.4% of the visitors received in 2023 and is the lowest figure since 2007, excluding the years impacted by the Covid pandemic (2020-2022), which disrupted global tourist flow.
The government initially set a goal of 3.2 million visitors in 2024, but this forecast was later revised downward to 2.7 million. This number is significantly below the actual figures and even further from the target of recovering the 4.2 million seen in 2019.
“It doesn’t feel like a significant change has occurred. The situation is somewhat better compared to during COVID, but worse than in previous years when business was thriving. If anything, the type of tourist has shifted: there are many more Russians now,” tour guide Rolando Pérez, who lives and works in Havana, told IPS.
The indicators for the nine main countries sending tourists to Cuba decreased by approximately 10 percent compared to 2023, with the exception of Mexico and Russia, which experienced a slight increase, while Spain and Italy dropped by 27.1 percent and 15.9 percent, respectively.
Canada ranks first with 39 percent of total visitor emissions, while Russia comes in second with 8.4 percent.
The second half of the year buried the statistics just as the energy crisis in the country began to worsen, marked by frequent cuts and three massive blackouts within two months. This left the island’s 10 million inhabitants without electricity and rendered previous forecasts useless.
Moreover, the lack of diverse culinary options, the disproportionate relationship between their quality and price, and the economic sanctions imposed by the United States on Cuba have negatively affected the performance of the chimney-less industry, which is one of the largest sources of foreign currency for the state.
According to the latest figures published by Onei, income from international tourism reached $1.3 billion in 2023.
Since Cuba is seen as a promoter of terrorism by Washington, citizens of the European Union and some other countries, including Japan, who visit the island lose their privilege of exemption from a tourist visa to the United States through the ESTA program.
According to a report submitted by the Cuban government to the United Nations, the country incurred losses exceeding $5 billion between March 2023 and February 2024 as a result of hostile US policy.
Against the tide
The decline in the number of foreign visitors can no longer be attributed to the post-Covid recovery process, as this contradicts global indices, particularly in Central America and other Caribbean countries.
According to the latest World Tourism Barometer from UN Tourism, a specialized agency of the United Nations, there were 1.4 billion international tourist arrivals recorded in 2024, indicating a significant recovery of 99% compared to pre-pandemic levels.
At the same time, there has been an 11% increase compared to 2022, which represents an additional 140 million tourists.
Although the pre-pandemic results in the Americas have not yet been reached, the Caribbean has already surpassed them by 7%, led by the Dominican Republic, which shows a difference of 32% compared to 2019. After all, it achieved a historic record of over 11 million visitors, with 59% entering through Punta Cana airport.
The Mexican beach resort of Cancun, a destination that competes with Cuba’s, welcomed approximately 16 million tourists.
UN Tourism predicts a year of surpluses for the sector in 2025, while the Cuban government seeks to attract 2.6 million travelers — a figure that may be more realistic but still far from the splendor of previous years.
Safe investments?
The five-star Iberostar Selection La Habana hotel was inaugurated in early February after six years of construction. It features 42 floors and 565 rooms. Standing at 154 meters above ground, it is the tallest building in Cuba. The cost has not been disclosed, although some experts speculate it may have been between 55 and 60 million dollars.
Managed by the Spanish chain Iberostar, this massive project sparked controversy from its inception and even more so during its construction, which exceeded the paralysis caused by Covid. This was mainly due to it being an investment with “100% Cuban capital,” financed by Almest Real Estate Company, part of the business group of the Revolutionary Armed Forces and a component of the Cuban Ministry of Defense.
“During COVID, I noticed that the country was at a complete standstill, yet the K Tower (as the hotel is commonly known, after the name of K Street, where it is located) continued to grow without interruption. More than once, I questioned whether it was worthwhile to spend money on it,” Havana resident Isabel Velázquez told IPS.
Although the project began in 2018, when the island welcomed its highest number of visitors – approximately 4.7 million – citizens opposed this architectural endeavor due to the significant decline in tourists from 2020 onward and its potential profitability amidst a severe economic crisis.
According to the latest data from Onei, 10.4% of the country’s investments from January to September 2024 were allocated to hotels and restaurants, an increase from the 7.2% spent during the same period in 2023.
The amount was nearly the same as that invested in enhancing the supply of electricity, gas, and water (11.4% of the total), which are critical issues for citizens. It significantly exceeded the investment in science and technological innovation (0.7%), an industry that was prioritized more in past decades as a means to develop the country.
Another reason for the criticism of resource use in hotel construction is the low occupancy rate, which was only 24% from January to September 2024.
At the end of 2023, there were 340 hotels, reflecting an increase of 14 compared to 2019. Among these, 82 were in the five-star category, which is 16 more than before the pandemic.
Overall, there were approximately 5,000 fewer accommodations during those years; however, more than 7,000 five-star hotel rooms became available. It seems that a shift toward luxury tourism is underway.
Some advocates of hotel projects argue that if these investments are not made today, when will they be made? During periods of higher tourist traffic, luxury hotels become saturated.
The average annual occupancy rate prior to Covid was critical, reaching 61.5% in 2016 – the highest figure in the last decade for hotels.
In any case, the government does not intend to change the direction of the invested funds.
By 2025, 2.8% of the investment budget will be allocated for the restoration of accessible rooms in 25 hotels, while 5.1% will be designated for 19 hotels in the state-owned tourism company Gaviota’s hotel program.
