Inside Carnival’s long journey to Cuba

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Carnival Adonia Havana

Carnival’s Fathom-line cruise ship Adonia arrives in Havana. Photo by Yaniel Tolentino.

Giora Israel doesn’t shy away from challenges. When Carnival Corp. launched cruises to Vietnam in the late 1990s, angry U.S. veterans protested the idea of promoting vacations to the communist dictatorship—even though such cruises became legal following the thaw in diplomatic relations between Washington and Hanoi.

“We were very sensitive to the veterans’ feelings and crafted a program around historical aspects of the Vietnam War,” said Israel, Carnival’s senior vice-president for port and destination development. “Let me tell you, after the first sailing, Vietnam became very popular with those veterans.”

Likewise, protests broke out among Cuban-born exiles in South Florida in March 2016, when Miami-based Carnival announced it would become the first U.S. company since the 1959 revolution to offer cruises to the island of their birth—cruises they would have been barred from under Cuban law.

Carnival then considered delaying until Cuba changed that law; a federal lawsuit also loomed. But, worried about losing millions in potential U.S. tourism revenues, the Castro government scrapped its ban a month later. That paved the way for Carnival’s newest cruise brand, Fathom, to begin seven-day excursions every other week from Miami to Havana, Cienfuegos and Santiago de Cuba onboard its 704-passenger MV Adonia. The first cruise departed May 1.

“As long as we operate within U.S. laws, we’re on solid ground,” Israel told Cuba Trade, noting that such cruises fall under the people-to-people travel category, since the U.S. embargo still bans outright tourism to Cuba. “We also have to be respectful of the community we live in. We have 1,200 Cuban-American employees in Miami, and a lot of them arrived from Cuba under very difficult conditions.”

That, however, did not deter the cruise line. “There’s an extreme thirst by Americans—less so by Europeans and Canadians—to see Cuba,” said Israel. “For some, it’s forbidden fruit, and for others, it’s because they’ve never been there and want to see Cuba before it changes.”

A Growing Field

While Israel’s company was clearly the first, it’s no longer the only player in the U.S.-Cuba cruise market. In January, Pearl Seas Cruises launched Cuba cruises from Fort Lauderdale’s Port Everglades, with voyages scheduled through December 2018. It’s itinerary, using a 150-passenger ship, includes the smaller ports of Cienfuego and Santiago de Cuba, as well as Havana.

In February, Norwegian Cruise Line joined in, announcing it would expand weekly sailings out of Miami aboard its 77,000-ton Norwegian Sky, which can accommodate up to 2,004 passengers. Twenty-five sailings between June and December have been approved; all will be four-night voyages that include an overnight stay in Havana as well as a stop at Great Stirrup Cay, Norwegian’s private island in the Bahamas. Prices to Cuba start at only $699 per person.

Finally, on April 20, Royal Caribbean International’s Empress of the Seas made company history when the 27-year-old liner’s 1,602 passengers departed the Port of Miami, bound for a five-night inaugural sailing to the island.

Mark Tamis, Royal Caribbean’s senior vice-president of hotel operations, told Cruise Critic his line is “is extremely proud” to have begun serving Cuba, and that “it’s super exciting to be offering our adventure-seeking guests of all ages the opportunity to discover the rich culture of this island nation… and meet its people first-hand.”

Also planning Cuba cruises: Oceania Cruises, Regent Seven Seas Cruises, and Azamara Club Cruise.

For now, Carnival is the most expensive cruise option to Cuba—an irony considering its brands generally cater to budget-conscious travelers. Fathom began advertising its seven-day Cuba cruises aboard the Adonia starting at $2,990 per person—almost double the $1,540 and up it was charging for similar voyages to the Dominican Republic.

“The Adonia is a smaller ship, with different economies of scale,” Israel explained. “Only weeks before we started operating, OFAC required that any American passenger going on a people-to-people trip had to buy [land programs] as part of their tour package. So the normal cruise price became more expensive…. Shortly after we began operating, that requirement fell.”

From Carnival’s point of view, 700 or so passengers times 26 sailings a year equal 18,200 guests—far less than 1 percent of the 12 million passengers expected to cruise with the world’s largest cruise-ship conglomerate this year.

“One 700-passenger ship going once a week to Cuba is not much for us at all, but it’s the beginning of a long relationship that may last forever,” Israel said. “And being first gave us a PR boost our company never had. We were on the front pages of hundreds of newspapers around the world.”

Carnival Paradise

Carnival’s Paradise will sail from Tampa to Havana. Photo supplied by Carnival Corp.

Long Time Coming

Planning for Cuba began in 1996, when Carnival bought a 50 percent stake in Italy’s Costa Cruises, which had finished renovating Havana’s cruise terminal only 10 months before. Yet because of the embargo, Carnival had no choice but to abandon Costa’s Cuba operations. Israel quietly set up a “Cuba committee” to scout out opportunities as bilateral relations improved under the Clinton administration, then worsened sharply under Clinton’s successor, George W. Bush.

Further momentum had to wait until President Obama’s Dec. 17, 2014, surprise announcement that the United States and Cuba would restore diplomatic ties and open embassies in each other’s capitals. Even so, the Fortune 500 giant (2016 revenues: $16.4 billion) was not about to wade into the contentious embargo debate.

“We have never met with anybody in Congress to discuss Cuba. We are not lobbying for any change in policy,” says Israel. But when Obama announced the policy shift in December of 2014, he says, “We were ready.” Once regulations were issued in January 2015, Carnival immediately applied for a permit to offer Cuba cruises from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), which enforces the embargo. That process took about three months from beginning to end.

Next on the agenda was applying to the Cuban government for permission to bring cruise ships to the island—a concept Fidel Castro had always opposed. In a 2005 speech, he famously complained that these “floating diversions visit countries to leave their trash, their empty cans and papers, for a few miserable cents.”

Fidel is now gone, and his brother Raúl has said little publicly about the cruise-ship industry. Just to be safe, said Israel, “it very quickly dawned on us that maybe a combination of a smaller ship and socially responsible cruising would be a good match. We knew Cuba didn’t get a lot of cruise-ship passengers and that they were concerned about big ships. We thought this would be the smartest thing to do, and in retrospect, I can tell you we did absolutely the right thing.”

Israel said Carnival began promoting its Fathom cruises even before the required Cuban government approvals, with the understanding that full refunds would be given in the event those approvals failed to materialize. In the end, that wasn’t necessary. Cuba signed off on the cruises, and on March 20, 2016, Obama—in the first visit to Havana by any sitting president in 88 years—declared that Carnival would begin cruising to Cuba shortly; he also announced that memos of understanding had been reached with Starwood Hotels and General Electric.

“After he finished his speech, we were asked to come on stage,” recalled Israel, who met Obama that day. “We were the only ones to sign an actual agreement, and we issued a press release minutes later.”

As thrilling as that moment was, it didn’t compare to the Adonia’s arrival in Cuba on May 2, the day after the gleaming white vessel departed the Port of Miami. “I had been in Havana a dozen times, but the arrival of the first U.S. cruise ship after 54 years was an extraordinary lifetime experience,” Israel said.

The Impact

How much cruising actually means for Cuba in dollar terms is debatable. If all the cruise lines that have expressed interest actually go through with their plans, the island could earn about $80 million a year, according to the US-Cuba Trade and Economic Council. John Kavulich, who runs the council, estimated that the cruise companies pay the Cuban government an average $500,000 per cruise, in addition to per-passenger expenditures.

According to the Florida Caribbean Cruise Association, the average expenditure by a cruise passenger visiting a Carribbean port is around $100; during the 2014-15 cruise season, the average per passenger was $103.83.

Cuba may prove to be an exception, however. FCCA President Michele L. Paige disputes the notion that U.S. cruise passengers will crowd the streets of Havana by the thousands without contributing anything to the Cuban economy. “Cruise passengers and crew [to Cuba] spend more than any other [cruise] tourist because they’re consuming, not relaxing. They’re on an educational quest,” she said. “Under U.S. law, they have to have a people-to-people educational experience.”

But noted Cuba travel expert Christopher Baker said he’s “dismayed”—to put it politely—with the multitude of Americans descending upon Havana in recent months. “The sheer volume of passengers now roaming the colonial plazas of Habana Vieja has diluted the ‘authentic’ Cuban experience,” Baker complained. “Until now, the land-based, people-to-people programs that have been the mainstay of U.S. visitation has drawn principally from a high-income and highly educated demographic. These have proven to be travelers who desire a deep cultural immersion in Cuba.” By contrast, he said, “Carnival’s clientele is down-market and will undoubtedly cheapen Cuba’s image.”

The situation has changed so radically, he claims, that entities such as National Geographic Expeditions—which has run P2P programs in Cuba for the past six years—is now looking for new venues, “as the cruise-ship throngs are being bussed en masse to artists’ studios and other places that previously offered a uniquely Cuban experience.”

Israel, of course, sees things differently. Cuba, he says, is still a relative virgin compared to far more accessible cruise-ship destinations such as Cozumel, Mexico; St. Thomas, U.S. Virgin Islands; and Montego Bay, Jamaica.

The Adonia’s last sailing from Miami will be May 28, which also coincides with the end of the Fathom brand itself. It will be replaced in June with the 2,000-passenger Carnival Paradise, which will begin Cuba voyages from its base in Tampa. Eight four-day sailings to Cuba are scheduled, as are four five-day sailings that include a stop in Cozumel or Key West. The 10-deck Paradise, at 262 meters long and with a draft of 7.8 meters, is the largest-size ship that can currently berth in Havana; the other ports in Cuba cannot accommodate a ship its size.

“For now, Cuba’s port infrastructure does not allow our ships to go to other ports. Obviously, once infrastructure improvements are made, ships will call on these other ports,” Israel explained.

Israel added that Carnival has identified “probably eight or nine ports on the north and south coasts of Cuba that would be appealing and interesting. We’re looking at all of them.” He declined to elaborate further, except to say that more cruise announcements are upcoming.

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  1. Daily Briefing - May 22, 2017 - Cuba Trade Magazine - May 22, 2017

    […] Carnival’s long journey to Cuba: Carnival Corp. has never shied away from offering cruises to destinations that not everybody believes should welcome U.S. tourists. They started offering cruises to Vietnam shortly after Washington and Hanoi renewed diplomatic relations. Now they are deepening their investment in Cuba, only a year after the company sent its first ship to the island. (Cuba Trade Magazine) […]

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