Cuba represents a “huge,” but challenging opportunity for US cruise, airline and hotel companies as US visitors to the Caribbean island could increase as much as sevenfold by 2025, a report by the Boston Consulting Group (BCG) said.
The study published yesterday forecast that up to 2 million Americans could visit, up from 285,000 last year.
Given that tourism infrastructure is already creaking, that means there are business opportunities aplenty, but US companies must learn to navigate a centrally planned economy with its quirks.
Photo: Reuters
US travel to Cuba has already surged, albeit from low levels, in the past two years since the former Cold War advesaries announced a detente and the administration of former US president Barack Obama eased travel restrictions to the island.
“The reality is that US travel to Cuba is in its nascent stages and all the players are still learning how to make it work,” the report read. “Success, as with most things Cuban, will require unusual — and often unorthodox — approaches.”
BCG did not address the uncertainty cast by the election of US President Donald Trump, who has threatened to roll back on the normalization of relations.
The Cuban government aims to double hotel capacity by 2030 through partnerships with foreign companies, it said.
So far, Starwood is the only US hotel company operating in Cuba.
Instilling a hospitality mindset in tourism workers who were mostly state employees, even at US-owned companies, on low wages could be challenging, it said.
Poor service sat particularly badly when rooms were “extremely expensive for the region.”
“The risk is that US travelers who visit Cuba and stay at a hotel that is part of a brand they trust will experience prices much higher than usual,” the report read.
There is also an opportunity to expand cruise lines to Cuba, BCG said.
Nearly two-thirds of 500 US travelers surveyed would consider one to Cuba.
Several US cruise operators have started offering lines to Cuba in the past year.
They have to deal with different challenges, such as including a cultural element to their trips to comply with US government rules on travel to Cuba, BCG said.
US companies should work with the Cuban government to resolve some of these issues, it said.
As for airlines, they needed to deal with excess demand for flights to Havana. They could carry out campaigns to lure Americans to other Cuban cities and tap into Cuban demand for flights to the US, BCG said.
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Advanced Micro Devices Inc (AMD) suffered its biggest stock decline in more than a month after the company unveiled new artificial intelligence (AI) chips, but did not provide hoped-for information on customers or financial performance. The stock slid 4 percent to US$164.18 on Thursday, the biggest single-day drop since Sept. 3. Shares of the company remain up 11 percent this year. AMD has emerged as the biggest contender to Nvidia Corp in the lucrative market of AI processors. The company’s latest chips would exceed some capabilities of its rival, AMD chief executive officer Lisa Su (蘇姿丰) said at an event hosted by
TECH JUGGERNAUT: TSMC shares have more than doubled since ChatGPT’s launch in late 2022, as demand for cutting-edge artificial intelligence chips remains high Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted a better-than-expected 39 percent rise in quarterly revenue, assuaging concerns that artificial intelligence (AI) hardware spending is beginning to taper off. The main chipmaker for Nvidia Corp and Apple Inc reported third-quarter sales of NT$759.69 billion (US$23.6 billion), compared with the average analyst projection of NT$748 billion. For last month alone, TSMC reported revenue jumped 39.6 percent year-on-year to NT$251.87 billion. Taiwan’s largest company is to disclose its full third-quarter earnings on Thursday next week and update its outlook. Hsinchu-based TSMC produces the cutting-edge chips needed to train AI. The company now makes more
NEXT GENERATION: The new 3-nanometer chip has 28 percent more transistors and offers up to 80 percent faster language model performance than its predecessor MediaTek Inc (聯發科) on Wednesday launched a new flagship smartphone chip, Dimensity 9400, made with Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) enhanced 3-nanometer technology, aiming to bring more artificial intelligence (AI) applications to edge devices like phones. The Dimensity 9400 is the second smartphone chip using TSMC’s second-generation 3-nanometer technology, after Apple Inc’s A18 Pro chip for the new iPhone 16 series. The new mobile chip has 28 percent more transistors, offers up to 80 percent faster large language model performance and is up to 35 percent more power-efficient than its predecessor, Dimensity 9300, MediaTek said. Chinese smartphone makers Xiaomi Corp (小米),
RSS