Corporate Beneficiaries of Travel to Cuba

Tuesday, June 16, 2009
From The Miami Herald:


If the United States lifted all restrictions on tourist travel to Cuba, what corporations would net the biggest gains? Two: Orbitz Worldwide of Chicago, Ill., and GAESA, S.A. of Havana.

Orbitz, the Internet travel agency, is ratcheting up its campaign to lift U.S. travel sanctions against Cuba. It has announced an on-line petition addressed to Congress and the Obama Administration, and to seduce signatories from the 14-million monthly visitors to its website, it is offering $100 coupons good for travel to Cuba if restrictions are lifted.

What's in it for Orbitz? Obviously there is an anticipated financial windfall from tourists booking vacations. Less obvious but more important, there are the good graces of the Castro brothers, who run Cuba. Their goodwill could make Orbitz the sole provider of travel services between the United States and Cuba, a monopoly worth millions.

Monopolies are not new to the Castros. Havanatur, a commercial entity of Cuba's Ministry of the Interior, has exclusive rights to arrange foreign travel and already contracts with a small cartel of agents in South Florida to arrange flights for Cuban Americans allowed to travel to the island. Obligingly the cartel allows the Castro regime to vet the travelers to exclude human-rights advocates and its outspoken critics.

Orbitz's Chief Executive Barney Harford, a British national, traveled to Cuba in 1997, and surely has the appropriate business connections with Cuban authorities to cash in if the United States lifts remaining restrictions. The same week Orbitz announced its Internet petition, however, the Cuban regime ironically issued a decree permitting only foreign visitors to access the Internet from Cuba's hotels and other tourist facilities.

Tourist facilities are among the few places in Cuba with access to the Internet, but islanders who don't work in the government-run tourist industry have been barred from entering hotels, restaurants, and other facilities ''reserved'' for foreign tourists. That apartheid has brought widespread criticism and serves as a slap of reality in the faces of those still promoting the idea that tourism will somehow ''open up'' the Castro regime.

Even more repressive are the Castro regime's Law 80, which makes it a crime for Cuban nationals to accept ''publications'' from foreigners, and the Ministry of Tourism's 2004 memo that prohibits hotel workers from accepting gifts and having any contact with foreigners outside the workplace.

For Orbitz to ignore such repression puts the company on the same low rung of the ladder of moral equivalence that the DeBeers Corporation occupied in South Africa's apartheid governments. DeBeers, world famous for diamonds, was set up by another British national, Cecil Rhodes. It used all the mechanisms of apartheid to ensure it had a cheap and docile labor force for its mines. Propped up by apartheid laws, DeBeers prospered to spawn other corporations and eventually to own 40 percent of all companies listed on the Johannesburg stock exchange.

In the Castros' Cuba, not all the spoils will go to Orbitz. To boost its revenues, the Cuban government has been promoting foreign investment in tourism since the mid-1990s. The foreign investor, however, must have a Cuban partner, and as head of the Cuban armed forces, Raúl Castro made sure the military would be that partner and become the driving force of the island's economy. Raúl established Grupo de Administracion Empresarial S.A. (Enterprise Management Group), or GAESA, a holding company for the military. He appointed several of his close confidants and relatives to GAESA positions, including its current chairman and CEO, Maj. Luis Alberto Rodriguez Lopez Callejas, who is married to Deborah Castro Espin, Raúl's oldest daughter.

No tourism-related transactions take place in Cuba without GAESA or one of its companies having a stake. GAESA leads the nation in foreign-exchange earnings and undoubtedly will be the biggest Cuban beneficiary of U.S. tourist travel to Cuba.

This leads to the next question: Who will be the biggest loser? Unfortunately, that will be the Cuban people. They will not only continue to be subject to the harassment and repression of Cuban government authorities, but also subject to the exploitation of their military's foreign partners.

The Cuban people deserve a better deal from U.S. policymakers.

Mauricio Claver-Carone is a director of the U.S.-Cuba Democracy PAC and founding editor of in Washington, D.C.