Tag Archives: Cuba Cruise

Carnival CEO says Trump likely to be pro-business

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Carnival Corp. CEO Arnold Donald with Travel Weekly editor in chief Arnie Weissmann at CruiseWorld. Photo Credit: Jamie Biesiada
 

Carnival Corp. CEO Arnold Donald said that the election of Donald Trump as president has the potential to be good for the cruise industry, but he also said he hopes that Trump will do “the right thing” internationally.

Donald made the comment during a conversation with Travel Weekly editor in chief Arnie Weissmann at CruiseWorld, an annual Travel Weekly event in Fort Lauderdale that brings together travel agents and travel suppliers.

Asked by Weissmann for his response to the election, Donald quoted Secretary of State John Kerry, who several years ago said that there are no winners or losers after a U.S. presidential election. “The next morning we all wake up as Americans” who work on problems together, Donald said.

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More specifically, Donald said, “On the surface, President Trump will be pro-business. At the same time, I hope he does the right thing internationally. Most of our business is outside the U.S.”

In a follow-up about Cuba, Donald said that despite Trump’s campaign rhetoric about reversing President Obama’s openings toward Cuba, “I’m cautiously optimistic that bringing the two countries together is the right thing to do.”

Earlier this year, Carnival Corp.’s Fathom brand became the first line to regularly shuttle passengers between the U.S. and Cuba in over 50 years.

Donald said Carnival continues to work on a private destination in the Bahamas but isn’t ready to announce anything. Carnival executives have said in the past they have a potential site picked out on Grand Bahama Island.

“We want the right one on the right terms,” Donald said. “We think we have something coming soon, but we don’t want to count the chickens before they hatch, so to speak.”

Donald took the chance to show the audience of several hundred travel agents clips from the new Carnival-produced Saturday-morning network TV shows, such as “Vacation Creation” and “Ocean Treks with Jeff Corwin.”

He also regaled the group with a tale of highlights from his rise to CEO of Carnival Corp. He said his initial introduction to Carnival Corp. chairman Mickey Arison was engineered by board member Uzi Zucker, a Bear Stearns partner who also served as an adviser to a private equity firm of which Donald was a part.

He also told about his ambition as an 11th-grader to be a very specific level of manager at a specific type of Fortune 50 company. He said the teachers at the all-boys Catholic high school in New Orleans he attended on scholarship constantly reminded their students to think big.

“Three times a day they told us, ‘Gentlemen, prepare yourselves. You’re going to run the world.'”

Agents get reacquainted with Royal Caribbean’s Empress

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Royal Caribbean International recently spent $50 million to refurbish the Empress of the Seas. It originally joined Royal in 1989 as the Nordic Empress and had been sailing for Pullmantur until earlier this year. The 1,602-passenger ship is currently doing 4- and 5-day Caribbean cruises from Miami through Oct. 29, but Royal expects to use it for cruises to Cuba once the Cuban government gives permission. Shown here is the pool deck.<br /><br /><strong>Photo Credit: Tom Stieghorst</strong>

Royal Caribbean International recently spent $50 million to refurbish the Empress of the Seas. It originally joined Royal in 1989 as the Nordic Empress and had been sailing for Pullmantur until earlier this year.
The 1,602-passenger ship is currently doing 4- and 5-day Caribbean cruises from Miami through Oct. 29, but Royal expects to use it for cruises to Cuba once the Cuban government gives permission. Shown here is the pool deck.

Photo Credit: Tom Stieghorst

 
Royal Caribbean International has an unusual dilemma with the Empress of the Seas.

Because it is planning to sail the ship to Cuba when it gets approval from Cuban authorities, it can’t plan cruises very far ahead on the ship’s current Caribbean itineraries.

So, for example, it can’t sell groups early in the booking cycle to get a base of business going. It only has inventory available through Oct. 29, basically a three-month window.

Moreover, Empress is an old ship — the former Nordic Empress — albeit with a recent $50 million makeover. There’s nothing really like it in the rest of the Royal fleet.

So Royal held an open house for agents last week, in a bid to show off the improvements, help agents get a better understanding of the ship and bring it top of mind.

The ship looked remarkably good for a 27-year-old vessel. Some minds were changed.

Cheryl Scavron, a Dream Vacations franchisee in Pompano Beach, Fla., said she initially thought the ship and its four- and five-day itineraries was best suited as a party cruise for young people. “Now that I see it again, I think this would be nice for a couple,” she said.

Over the course of a couple of hours, about 200 agents got a thorough tour of the ship’s cabins and public spaces. They also got entertained by a Cuban combo in boleros; had a sample of the mixed drinks served onboard; saw snippets of two main theater shows, “Bailamos” and “Three”; and had a lunch of branzino or steak in the main dining room.

Two Royal executives, senior VP of hotel operations Mark Tamis and senor VP of sales Vicki Freed, hosted the event, but Scavron was impressed that Royal brought sales reps, not only from South Florida, but from as far away as California, to conduct the tours.

“Vicki really knows how to sell a ship,” Scavron said. “She brought in enough people, and had good entertainment. She made the ship look the best it can look,” she said.

Big changes in Cuba, but infrastructure needs to catch up

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Kempinski is refurbishing the Hotel Manzana de Gomez in Old Havana. Photo Credit: Johanna Jainchill
 

In advance of President Obama’s historic trip to Havana this week, his administration made perhaps the most significant changes so far to the regulations surrounding Cuba tourism by allowing Americans to visit the island without being a member of a tour group.

On its face, the rules about what U.S. visitors can do in Cuba don’t change: Individuals are only allowed to travel to Cuba for one of 12 reasons, including “people-to-people educational” trips. But on people-to-people trips, they no longer have to travel with a licensed group.

Regular tourism to Cuba is still technically illegal, but the rules are essentially unenforceable. Americans will be able to travel on their own in Cuba by self-certifying via an affidavit that they are conforming to the regulations, which the Department of the Treasury defined as “a full-time schedule of educational exchange activities intended to enhance contact with the Cuban people, support civil society in Cuba or promote the Cuban people’s independence from Cuban authorities and that will result in a meaningful interaction between the traveler and individuals in Cuba.”

Ronen Paldi

Ronen Paldi

Tour operators to Cuba said last week that they were not concerned about the effects of the new rule on their business. Even if the embargo were lifted tomorrow, they said, the island is sorely lacking in the infrastructure necessary to accommodate a mass influx of individual travelers. 

“Cuba is facing tremendous challenges,” said Ronen Paldi, the president of Ya’lla Tours USA, which has been operating in Cuba since 2002. “In the last 15 to 16 months, the administration is doing all this easing of the restrictions. But what has not changed is the infrastructure in Cuba. Hotels are full, completely sold out until May 2018. Prices are going up, space is becoming more and more limited.”

Diane Mullahy, the president of Travel Leaders in Framingham, Mass., has been building a Cuba business since regulations first relaxed last year and has had to contend with a lack of rooms and restaurants.

“The problem is travel there has increased 70% since last year, and there are not enough hotels, and each time I go the restaurants are packed,” she said. “It’s just so busy. They have a long way to go.

Diane Mullahy

Diane Mullahy

“I have clients go down, and I tell them anything can happen. You have to be flexible.”

Another major impediment to the ease of traveling individually is that even though the Obama administration last year made it legal for credit-card companies to operate in Cuba, U.S.-issued credit cards are still not usable on the island, and U.S. banks have not enabled ATM withdrawals there, meaning everyone has to go with cash only.

“The problem is that, so far, relatively few U.S. banks have been willing to go through the process of making arrangements with the Cuban government and with Cuban merchants to actually accept U.S. credit cards,” said William LeoGrande, a professor at American University. “The profit margin is small, and they are afraid of large fines from the Department of the Treasury if they inadvertently violate the embargo.”

And while the Obama administration said the change was intended to make educational travel to Cuba more accessible and less expensive for Americans, so far the opposite is true.

“We’ve seen costs increase by 40% and 20%, respectively, over the past year,” said Tom Popper, president of Insight Cuba. “If demand increases, it’s more likely we will see prices increase even more.”

But for some businesses, the relaxed regulations are a boon.

Tom Popper

Tom Popper

Havana-based Cuba Travel Network has specialized in individual travel to Cuba since 2002. Founder and CEO Eddie Lubbers, who is Dutch, said that while his business is predominately non-Americans, that is changing: Americans represented 6% of his business in 2014, a number that shot up to 23% in 2015. With the recent changes, he expects the U.S. portion to grow to as much as 50% of his business.

The company is ideally positioned to take advantage of the recent changes because it enables travelers to book individual components in Cuba, such as hotels, flights and cars online, and also offers individual itineraries that fall into the categories under which people can legally travel.

Lubbers said the U.S. travel agent side of his business is also growing, with agents using Cuba Travel Network to book entire itineraries for small groups or individuals and receiving commission.
“It gives them a perceived expertise in the market,” he said.

While the changes may mean the opening of new businesses geared toward individual Cuba travelers, Paldi is among the long-time operators who noted that having years of relationships and experience in Cuba means more than ever right now, especially with hotel space so limited.

“We can service you [last-minute] because we have access to what’s available and what’s not available,” Paldi said.

Lubbers added that Cuban leaders recently made it clear at events in Europe that they respect companies that have been doing business in Cuba during the last 20 years.

“Agencies will spring up and say, ‘We are going to offer travel to Cuba,’ ” he said. “They may be able to do that from the demand side, but from the supply side it’s more difficult.”