HAVANA, Cuba — This is alluring, unexplored territory for many travelers — and for Georgia businesses that have been eyeing potential opportunities in the nation of 11 million people.
They range from Coca-Cola and UPS to credit card processors and chicken farmers. The recent start of scheduled U.S.-Cuba airline flights will make it easier for such companies to scout out prospects and take initial steps.
Yet challenges and uncertainty remain, chief among them what will happen to the measured moves to liberalize relations between the United States and Cuba engineered by the outgoing Obama administration.
President-elect Donald Trump has threatened via tweet to “terminate the deal” if Cuba “is unwilling to make a better deal” for Cubans, Cuban Americans and the United States.
Some U.S. companies have already begun operating in Cuba over the last couple of years, including Starwood and Airbnb, while other businesses are still watchful.
Atlanta-based Delta Air Lines put a stake in the ground by launching flights to Havana Dec. 1 and opening a ticket office in the city.
Cuban tourism is already a fairly established market, even with limited hotel and technology infrastructure and limits on American travel.
“The economy depends on tourism,” said Monica Llanes Vilar, speaking in Spanish while sitting in a Havana apartment she rents to tourists via Airbnb. “It’s a good economic benefit.”
Llanes Vilar made a variety of investments and improvements before renting out the two-bedroom apartment, including colorful new paint in the rooms, flat-screen televisions and new serving dishes and plates.
Visitors from Latin America, Europe and Canada fill tourist districts in Havana, eager to see the architecture, nightlife, aging buildings, classic cars and vibrant culture including music and art.
“The greatest business opportunities are in transportation … it’s in tourism, and it’s in telecoms,” said Charles Shapiro, a former U.S. ambassador to Venezuela and the current president of the World Affairs Council of Atlanta.
Limits of an economy
But, Shapiro cautioned, there are limits to the size of the opportunity for business in Cuba, both because of the continuing embargo on most U.S. exports and because of the Cuban economy. Salaries average roughly $20 to $30 a month.
And, Shapiro said, “all those things U.S. businesses take for granted are just missing [in Cuba]. There’s no Costco, there’s no Home Depot. If something breaks in your kitchen, there’s nowhere to buy parts to repair your stove. There’s no way to enforce contracts.”
For Coca-Cola, Cuba is one of two countries where it does not operate — the other is North Korea — because of the embargo.
Coca-Cola says it is “among the most global companies in the world, and we certainly are interested in doing business everywhere we are allowed to operate.”
Demand is already demonstrable, however. You can already find cans of Coke in Cuba imported from other markets by unauthorized third parties. Industry experts say Coke is brought into Cuba from Mexico, though it is not as common as the local “kola” made by Ciego Montero.
“Everything has two challenges with Cuba,” said Collin Laverty, who helps businesses operate in Cuba through a business called Havana Strategies and offers tours through Cuba Educational Travel.
“One is U.S. law. The Obama administration has opened a lot of loopholes. The other issue is, it’s a tough business environment in Cuba. It takes a while to get deals approved,” and ownership issues are complicated.
If imports and exports were to expand, that could create a huge opening for a key Atlanta area-based shipping company. Cuba lacks the logistics infrastructure of other countries, and that’s a specialty of Sandy Springs-based UPS.
UPS does not operate in Cuba, and said it “continues to assess the opportunity to provide services to and from Cuba.”
“As trade lanes open and demand for delivery services increases, UPS will take appropriate action to meet the needs of our global customers.”
Promising transactions
Another huge area that could develop in Cuba is financial transactions. Even if the embargo were relaxed to allow more commerce, many small Cuban businesses don’t have the ability to accept credit cards, and Internet service is limited.
Credit card processing and payment giant First Data, based in Atlanta, said Cuba “has a vibrant culture and burgeoning merchant community that provides a unique opportunity for U.S. companies with a large international footprint.”
“As a global commerce leader, First Data has the experience to support businesses, banks and the government as Cuba expands its payment infrastructure and opens its doors wider,” First Data vice chairman Joe Plumeri said in a written comment.
In the tourism industry, the lack of hotel room availability could slow business growth created by the new airline connections. But Starwood Hotels & Resorts already operates a newly-opened hotel in Cuba, the Four Points Havana, and plans two more.
Competing hoteliers are likely to explore the Cuba market as well. Atlanta-based InterContinental Hotels Group, which operates Holiday Inn and other brands, said: “The Cuba market represents an opportunity for the entire hospitality industry.”
“We are certainly interested in future hotel opportunities there, but we have nothing to share at this time,” IHG said.
Meanwhile, Airbnb has been filling the void, after launching operations in Cuba in 2015.
Chicken business
The poultry industry has long done business in Cuba, with exports allowed since 2001.
Chicken is the No. 1 U.S. export to Cuba and Georgia is the largest chicken-producing state, according to Jim Sumner, president of the USA Poultry and Egg Export Council, based in Stone Mountain. Cuba is the fifth-largest export market for the U.S. chicken industry, he said.
A key barrier, however, is that chicken exporters cannot extend credit to Cuba, Sumner said, and Cuba has “a very struggling economy … this is the reason why they want credit, is because they don’t have the money to buy product.”
But, “as tourism increases, their economy will improve, credit will no longer be quite the concern that it was, there will be more money in the economy, they’ll be able to import more products,” Sumner said.
Americans visiting Cuba, he added, “are going to want products other than just chicken-leg quarters.”
Home Depot has also been watching the Cuba market, said spokesman Stephen Holmes, noting that professional contractors occasionally buy goods at Home Depot stores in South Florida for use in Cuba. The need for re-investment and renovation is evident in some of the dilapidated buildings in Cuba.
“We know at some point in time when the environment is right, there could be an opportunity for The Home Depot in Cuba,” the Atlanta-based company said. “But we believe before we do anything there, it needs to benefit the people of Cuba and there needs to be the correct legal system in place.”
Laverty said he thinks steps by the Trump administration to halt travel and business between the two countries “would set the U.S.-Cuba relationship back 20 years,” and cost U.S. companies that have already invested millions.
Business deals between American and Cuban companies, along with increased travel and communication capability, “have made a restored U.S.-Cuba commercial and cultural relationship an inevitable reality,” according to Laverty. “Things have moved very quickly in just two years.”
HOW TO GO TO CUBA
Who can go?
Anyone can now go to Cuba, as long as their travel falls under one of 12 categories allowed by the U.S. government. They include family visits; professional research and professional meetings; educational activities; religious activities; and humanitarian projects. Tourism is not a permitted category, but one of the common categories for visitors is “people-to-people travel” which should include a “full-time schedule of educational exchange activities” with meaningful interaction with Cubans. You don’t need to get permission from the federal government for such travel, but you should maintain records of your Cuba-related transactions for at least five years.
How do I get there?
U.S. airlines recently launched scheduled flights, including Delta Air Lines with a daily route from Atlanta to Havana. Amid the wave of new flights, some good deals on fares can be found. A recent search showed an Atlanta-Havana roundtrip priced at $334 for mid-January, if your travel dates are flexible.
Where will I stay?
Finding lodging in Cuba can be a bit more complicated than in other destinations. Hotels are limited and can be pricey. There is a new Sheraton Four Points Havana, and there are European-branded hotels such as the Melia Habana. Delta Vacations also offers packages that allow you to book a hotel with a flight. Another option is Airbnb, which allows you to book a room or a private apartment or villa in Havana and pay in advance.
What else should I know?
U.S.-issued credit cards and debit cards do not work in Cuba, so you need to bring enough cash with you to cover all expenses. It helps if you are able to pay for your hotel or rental in full in advance, before you leave the United States.
