By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A prominent businessman yesterday said it was “inevitable” that a fully-open Cuba will eventually “take a piece of the Bahamian tourism pie”, amid calls for this nation to urgently boost its economic competitiveness.

Dionisio D’Aguilar told Tribune Business that the latest step taken by the US and Cuba to ‘normalise’ diplomatic and economic relations would likely have little to no impact on the Bahamian economy in the short-term.

Yet he agreed that yesterday’s developments had brought closer the day when the US would lift restrictions on American leisure/business travellers visiting Cuba, thereby threatening the source market that provides between 80-85 per cent of this nation’s annual stopover visitors and the majority of its cruise passengers.

Showing what could happen to the Bahamas when Americans were allowed to freely travel to the US, Mr D’Aguilar recalled his recent vacation to south-east Asia.

There, a hotel sales manager in Laos told him that bookings were down by 50 per cent because nearby Burma had opened up to foreign travel.

Meanwhile, Gowon Bowe, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman, told Tribune Business it was now even more urgent for this nation to make progress in areas such as energy reform.

He explained that such initiatives were vital to maintaining the Bahamas’ tourism competitiveness and ‘value for money’ proposition against a lower-cost Cuba that was now increasingly opening up to America visitors.

But, on the positive side, Mr Bowe called on the Bahamian private sector to exploit its existing links and proximity to Cuba to be the ‘first movers’ into that country on export and business opportunities.

From the Bahamas’ narrow perspective, the good thing about yesterday’s events is that the US embargo and general travel restrictions on Cuba remain, with Congress unlikely to ease this any time soon.

Travel restrictions, though, have been eased in 12 specialist categories, this ushering in the day the Bahamas should have long prepared for - that of Cuba opening up fully to the US tourism and casino gaming market.

That market has effectively been closed for 55 years, since Fidel Castro and his ‘Barbudos’ swept down from the Sierra Maestra mountains in 1959, helping to ensure the Bahamas’ enduring relative success in tourism.

But yesterday’s Washington-Havana diplomatic ‘breakthrough’ adds another challenge to the multiple issues confronting the Bahamian economy and its private sector, and will likely spark much-needed debates on diversification and competitiveness.

“That’s another thing for us to contend with,” Mr D’Aguilar told Tribune Business of yesterday’s US-Cuba pronouncements.

“In the short-term, it probably means nothing. But in the medium to long-term there probably is somewhat of a risk to our tourism arrivals numbers because interest will be piqued by something different and new.”

Cuba, Mr D’Aguilar added, had just those qualities, plus long-standing ties to the Cuban-American community in south Florida - a key Bahamian source market.

“It adds one more destination in the Caribbean to choose from, which doesn’t bode well for established tourism destinations such as the Bahamas in the medium-term,” the former Bahamas Chamber of Commerce president told Tribune Business.

The short-term impact on the Bahamas from even a minor ‘opening up’ of Cuba is likely to be minimal to non-existent.

This is because Cuba has much to do to get its hotels and related tourism infrastructure up to international standard.

Then there are also the issues surrounding the outstanding multi-billion dollar reparations claims that US companies have against the Cuban government, which nationalised their property and assets in the early 1960s.

Finally, despite efforts to encourage foreign direct investment (FDI), the Castro regime has in recent years still displayed its controlling tendencies by jailing various foreign businessmen and seizing their businesses/assets. None of which, to put it bluntly, is good for business.

Still, Mr D’Aguilar emphasised that Cuba was a “sexy destination”, with a culture, history and mythology likely superior to the Bahamas. It was also able to offer a ricah variety of diverse experiences via its mountains and other geography.

“I don’t think we can really maintain our market share when Cuba opens up,” Mr D’Aguilar warned. “People will be interested in going there who have not gone before.

“I don’t think we can combat that. It’s going to take a piece of your pie. It’s inevitable. I don’t think you can do anything to prevent that. I don’t think we can stop that. We just have to adapt to the fact it’s going to happen.”

Mr D’Aguilar said that, much like the Bahamas’ Baha Mar/Atlantis conundrum, the ‘saving grace’ with Cuba could be that the island attracted more visitors to the Caribbean - growing the tourism pie, rather than splitting it.

“We can sit here and prophesise until the cows come home,” he added. “We can pull our hair out, but don’t know what is going to happen.”

Mr Bowe, meanwhile, said that while Cuba had “always been a significant rival” to the Bahamas on tourism, any opening to US visitors ushered in a new era.

“If that opens up to the free flow of tourism and economic resources, that’s going to result in a new dynamic with respect to our economic activities,” he told Tribune Business.

“We have to ensure we remain competitive, and that’s where energy reform plays a big part.”

Mr Bowe essentially warned that the Bahamas needed to move with ever-more haste to boost its economic competitiveness via key reforms, ensuring its tourism industry gave “paid value for money” and was competitive on price.

“Once it gets fully open to the US, that’s a big challenge and big competitor for us,” he added.

Still, Mr Bowe said Bahamian companies had a “great opportunity” to be “first movers into Cuba, given that we understand them better than anyone else”.