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Western Hemisphere > Cuba

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  • Type: Journal Issue x
  • Econometric Modeling: General x
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Cover IMF Working Papers
Revisiting the Potential Impact to the Rest of the Caribbean from Opening US-Cuba Tourism
Mr. Sebastian Acevedo Mejia
,
Mr. Trevor Serge Coleridge Alleyne
, and
Rafael Romeu
The Cuban revolution and the subsequent US embargo on Cuba helped shape the tourism sector in the Caribbean, facilitating the birth and growth of alternative destinations. Therefore, the apprehension of the Caribbean tourism industry towards a change in US travel policy to Cuba is understandable, but likely unwarranted. The history of tourism in the region has shown that it is possible for all destinations to grow despite large changes in market shares. Our estimations show that liberalizing US-Cuba tourism could result in US arrivals to Cuba of between 3 and 5.6 million, most of it coming from new tourists to the region. We also identify the destinations most at risk of changes in US-Cuba relations.
Keywords:
WP; tourist; Cuba; tourism industry; Tourism; Caribbean; Trade; Gravity model; US-Cuba relation; opening US-Cuba; tourism flow; visit Cuba; US-Cuba restriction; US-Cuba tourism; Gravity models
Cover IMF Working Papers
Vacation Over: Implications for the Caribbean of Opening U.S.-Cuba Tourism
Rafael Romeu
An opening of Cuba to U.S. tourism would represent a seismic shift in the Caribbean's tourism industry. This study models the impact of such a potential opening by estimating a counterfactual that captures the current bilateral restriction on tourism between the two countries. After controlling for natural disasters, trade agreements, and other factors, the results show that a hypothetical liberalization of Cuba-U.S. tourism would increase long-term regional arrivals. Neighboring destinations would lose the implicit protection the current restriction affords them, and Cuba would gain market share, but this would be partially offset in the short-run by the redistribution of non-U.S. tourists currently in Cuba. The results also suggest that Caribbean countries have in general not lowered their dependency on U.S. tourists, leaving them vulnerable to this potential change.
Keywords:
WP; U.S. tourist; tourism restriction; market concentration; OECD country; U.S. tourism