Tourism plays an extremely import role in Cuba's economy. Before the Cuban Revolution the country was the "Las Vegas, New Orleans and Miami” of the Caribbean and one of the world's most popular tourist destinations. The government has long realized the importance of tourism as a source of much need capital. In the last five years tourism has increased 30 percent annually and become the biggest foreign exchange earner. Most visitors come from Canada, Europe and Latin America and now the United States. Before the easing of travel regulations, U.S. citizens visited the country illegally through third countries. It will not be long before Americans with flocking to its next-door neighbor as they once did.
Tourism is hottest market that has the potential to produce billions of dollars annually. The number of tourists visiting Cuba is growing. In the 1950s during the Batista era, Cuba was the most popular tourist destination in the Caribbean. Now, the Cuban government realizes that tourism may be the salvation for Cuba's economic woes.
Cubancan is the organization behind the country's emphasis on tourism. They have already set the building blocks for a new infrastructure — with improved roads and transportation, a cruise ship terminal in Havana, new marinas, golf courses planned in the future, airport expansion and joint foreign investment. There has also been a joint venture hotel boom with foreign corporations contributing to the new infrastructure. About 3 to 5 thousand hotel rooms are being built each year. There is a new emphasis to develop multi-destinations within the island.
The government has even offered non-socialistic incentives allowing foreign investors to operate in the country for at least 10 years without paying income tax. Jobs at tourist resorts are highly sought because of the availability of dollars and foreign goods.
Tourist visits to Cuba mushroomed from less than 350,000 in 1990 to more than 2 million by 2000. In recent years despite the embargo Cuba has averaged annually around 3,000,000 tourists. Once American citizens can visit en masse, that figure will double in short time.
Currently tourists generate more than a billion dollars a year. Previously, Canada provided the most visitors— 170,000 — followed by Italy, Germany Spain and France. This is not to mention all of the Americans who are starting to pour into the country now.
The injection of hard currency into Cuba’s economy will set in motion waves of investment by both private and public investors, keen to upgrade the island’s infrastructure including new roads, port modernization, fixed and wireless telephones, an expanded power grid, and much more.
Cuba now boasts over 30,000 hotel rooms, second only to the Dominican Republic, thanks to a recent building boom in tourism. Information suggests there will be a shortage of high-quality hotel rooms if tourism continues to grow at its current pace. When the embargo is completely lifted tourism will really soar upward. About 150,000 Cubans work in tourism-related businesses.
You should seriously think about investing in this tourism boom in the future. The businesses that are derived from it — bars, restaurants, tours, hotels and outdoor activities are fields worth exploring for investment opportunities. The author has personally observed this phenomenon repeatedly in Costa Rica, Panama, and Nicaragua. Someday the needs of a burgeoning expatriate community will also give rise to new enterprises. If you have a skill in a particular area perhaps you will be able to put it to use in the ‘new’ Cuba. If you are experienced in the field of business you choose, your chances for success will greatly increase.
Ecotourism is an exciting new field offering many possibilities for savvy investors. Cuba is taking steps to preserve its wealth of natural beauty. The government has set aside more than 100 protected areas as reserves and national parks and wants to share it responsibly with tourists. The country boasts more than 4000 miles of coastline with 300 beautiful beaches and 4000 keys. A world of coral reefs, thousands of species of marine flora and fauna can be found in Cuba's warm crystal clear waters. Cuba has more than 6000 species of plants with 4 percent of the earths vegetation found on the island. It has mountains, forests a limestone caves in many parts of the country. Birdwatchers will be in heaven in Cuba with over 400 species of birds of which 32 are only found here. All of this combines to make Cuba an Ecotourism paradise.
Future investors should remember that running a business in a foreign country is not lot like managing a one in the U.S. or Canada. Rules, regulations, work ethic, the customs of the people and the way of conducting business will be different than what you expect. You are best advised to try to play by the rules and adapt to the way things work in Cuba. Speaking Spanish will help you immensely when engaging in business transactions and communicating in general.
Be sure to check out restrictions and the tax situation. And it is important choose a business in which you have a vast prior experience. It's much more difficult to familiarize yourself with a new type of business in a foreign country.
Remember you will be doomed to failure if you try to be an absentee owner. A trustworthy partner or manager can mean the difference in success and failure. Make sure you choose a partner with local experience. Don't trust anyone until you know them and have seen them perform in the workplace.
Before forming a partnership you should decide what parts of the business each partner will run in order to avoid problems down the line. Bureaucracy can also be stifling in any foreign country, not to mention a country that has been isolated from the mainstream for decades. If you start a business with employees, be aware of your duties and responsibilities as an employer. Know what benefits you will have to pay in addition to salary to avoid problems. The more employees you have, the more headaches you will have.
Before you put a penny of your money into any type of overseas investment there are a few simple rules you should follow. Adhering to these principals will help you make more prudent decisions and protect your investments. Remember as attractive as a foreign investment may seem on the surface, there is always a downside. Bear in mind the rules of doing business vary from country to country and are especially difficult in Cuba due to its unique circumstance. The most important thing you can do is your "homework," that is to say, study the feasibility of your potential investment thoroughly before exchanging any money. Be especially wary of "blue ribbon deals" that appear to be too good to be true. Trust your intuition and gut feeling at times. However, the best strategy and rule of thumb is, "Test before you invest."
Many people will have impossible dreams about what business will be like in Cuba. It is a huge mistake to assume that success will come easy in Cuba. Also many unforeseen problems will surely arise.
Someday there will be a market for almost any consumer product you can think of. A lot of money will be made in the local market supplying products. Cuba's 11 million people provide a large untapped consumer market. Furthermore, there will soon be a large number of people who are used to U.S. goods and services due to an increasing number of foreign residents and eventual influx of Cuban exiles. All you have to do is find a need and fill it.
