Cuba allows tourism industry to hire private contractors

HAVANA Wed Oct 9, 2013 12:29pm EDT

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HAVANA (Reuters) - Cuba has authorized its state-run tourism industry to contract out lodgings, meals, excursions and other activities to private businesses in a boost to a growing "non-state" sector.

While the government has allowed some state contracting to private businesses since 2012, up until now the tourism industry was off limits.

Tourism is the country's largest industry, attracting 2.8 million visitors in 2012 with revenues approaching $3 billion.

The new regulations, published on Wednesday in the official gazette (www.gacetaoficial.cu), authorize state-run tourism agencies to use the more than 5,000 bed and breakfasts and 1,700 private restaurants now operating in the communist-run country, as well as private entertainment and transportation.

Further, hotels and other tourism facilities can now contract with private businesses to provide meals for workers, gardening and other services.

"Cuba's tourism has been stuck in a 'state provides all' framework for years," said Paul Webster Hare, former British ambassador to Cuba, who currently lectures on international relations at Boston University.

"As a service industry small and imaginative often attracts tourists better than the 'one size fits all,' which has been a feature of the way the big Cuban state- and military- owned companies have run the sector," he said.

Tania Rodriguez, who rents out rooms in the Colonial district of Havana, applauded the measure as key to continued growth of the tourism industry and as a way to improve quality and variety.

"The private sector has provided quality and comfort for tourists who have visited for many years," she said. "I think we are essential if Cuba is going to continue to attract tourists."

Cuban President Raul Castro, who took over for his ailing brother Fidel in 2008, has opened up retail services to small entrepreneurs as part of a larger reform effort aimed at modernizing a Soviet-style economy where the state up until 2010 administered just about everything down to shoe shining.

Castro is encouraging private sector growth to create jobs for the 1 million employees he hopes to slash from bloated government payrolls over the next few years. His goal is to strengthen Cuban communism to assure its future.

There are currently more than 450,000 people operating or working in small businesses or are self-employed in the building trades, transportation, entertainment and other sectors, as well as more than 200 cooperatives.

State-run tourism agencies have been sounding out the owners of restaurants and small lodgings throughout the year, and many, at least in Havana, have expressed little interest, according to industry sources. They point out that individuals visiting the Caribbean island are already free to rent rooms and eat at private establishments.

However, Cuban economists said the opening of the tourism industry was sure to be viewed by some as a business opportunity.

"During the tourism season the good restaurants and bed and breakfasts are usually booked solid, without having to sign a contract with the state," one of the economists said, wishing to remain anonymous.

"But now, if you are thinking of venturing into the private sector, this could be an opportunity to get started," he said.

(Reporting by Marc Frank; Additional reporting by Nelson Acosta; Editing by David Adams and Eric Beech)

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Comments (2)
PRS24 wrote:
The US Government should allow all US citizens to travel there with no string attached. We would overwhelm the Cuban Government with our hamburgers, large fries, and large cokes, to the point where free market forces reign supreme.

Oct 09, 2013 3:29pm EDT  --  Report as abuse
PRS24 wrote:
The US Government should allow all US citizens to travel there with no string attached. We would overwhelm the Cuban Government with our hamburgers, large fries, and large cokes, to the point where free market forces reign supreme.

Oct 09, 2013 3:29pm EDT  --  Report as abuse
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