Holland America Line Adds Potential 14,850 Passengers To Cuba in 2017/2018

Seattle, Washington-based Holland America Line (a subsidiary of Miami, Florida-based Carnival Corporation & plc; 2016 revenues exceeded US$16 billion), has announced sailings from the United States to the Republic of Cuba commencing in December 2017.

Holland America Line to Sail to Cuba on Roundtrip Fort Lauderdale Itineraries Aboard ms Veendam Beginning in December 2017
   
Premium cruise leader to offer an extended call at Havana and visit to Cienfuegos on seven-, 11- and 12-day Caribbean itineraries

Demand expected to be high when Cuba cruises open for booking on May 26, 2017

SEATTLE, May 24, 2017 /PRNewswire/ -- Holland America Line has received approval to begin sailing to Cuba from Fort Lauderdale, Florida, starting with the Dec. 22, 2017, 12-day holiday cruise aboard ms Veendam. Holland America Line becomes Carnival Corporation's third cruise line to be approved to sail to Cuba following the company's historic inaugural sailings to the island last year.

The addition of Veendam itineraries will help meet the growing demand for premium cruise experiences to Cuba. Nine seven-day itineraries will feature the capital city Havana, and three of these will add another Cuba call at Cienfuegos, known as the model of early 19th century urban planning in Cuba. The 12-day holiday cruise showcases both Cuban ports. Depending on the departure day, cruises include the Cuba ports, as well as a combination of Caribbean ports, including Amber Cove, Dominican Republic; Belize City, Belize; Costa Maya and Cozumel, Mexico; George Town, Grand Cayman; Grand Turk, Turks and Caicos; Key West, Florida; and Montego Bay, Jamaica.

"For many, travel is about seeking new places to explore and discovering meaningful new cultural opportunities, and Cuba is one of the most sought-after new destinations for many of our guests," said Orlando Ashford, president of Holland America Line. "We are excited to finally be able to include Cuba in our itineraries, and our guests and travel partners have been anxiously awaiting a premium cruise experience to this relatively undiscovered Caribbean treasure."

As leaders in destination immersion and experiential travel, Holland America Line adds Cuba to its itineraries in order to provide guests with a thoughtful cultural exchange experience. Most itineraries include an extended call at Havana, allowing guests the time to explore the UNESCO World Heritage Site and immerse themselves in a wide array of historical and cultural adventures. Additionally, a stop at Cienfuegos presents the opportunity for a special visit to Trinidad, a UNESCO World Heritage Site in Cuba's province of Sancti Spíritus.

The series of Cuban cruises will debut with the Dec. 22, 2017, 12-day holiday sailing roundtrip from Fort Lauderdale. In addition to the seven-day cruises, an 11-day spring cruise sails March 17, 2018, and also features the Cuban ports of Havana and Cienfuegos, as well as Key West, Cozumel, Montego Bay and Georgetown. The final seven-day Cuba sailing departs on April 18, 2018.

On board, the Cuba experience will be enhanced through the line's Explorations Central, or EXC, program, featuring EXC Guides who will bring the destination to life through presentations and EXC Talks that will enable guests to deepen their understanding of the Caribbean's largest island. Also enriching the Cuba experience for guests are EXC Port Maps created for the Cuban calls, EXC Encounters that will showcase the culture and history of Cuba to guests before they visit the ports, and much more. In addition, educational and cultural EXC Tours are being developed in and near Havana and Cienfuegos with a highlight being Trinidad, one of the best-preserved historic towns in the Caribbean.

Bookings for Holland America Line's cruises to Cuba will open May 26, 2017. Guests booked on Veendam's previous deployment will be given a full refund and opportunity to book on another Holland America Line voyage. Fares for Cuba cruises begin at $899 per person, double occupancy. Taxes, fees and port expenses are additional.

The visits to Havana and Cienfuegos comply with regulations of the U.S. Department of Treasury that permit travel operators to transport approved travelers to Cuba to engage in activities as defined by the U.S. Department of Commerce, Office of Foreign Assets Control. All information about special requirements for travel to Cuba is available at hollandamerica.com.

The deployment of the 1,350-guest Veendam to Cuba adds Holland America Line to the historic launch of cruises to the island nation from the U.S. by Carnival Corporation sister brands Fathom and, more recently, Carnival Cruise Line.

For more information about Holland America Line, consult a travel professional, call 1-877-SAIL HAL (1-877-724-5425) or visit hollandamerica.com.

Editor's note:  Photos are available at https://www.cruiseimagelibrary.com/c/xdesj1ku.

Find Holland America Line on Twitter, Facebook and the Holland America Blog. Access all social media outlets via the Online Communities quick link on the home page at hollandamerica.com.

About Holland America Line [a division of Carnival Corporation and plc (NYSE:  CCL and CUK)] 

Holland America Line's fleet of 14 ships offers more than 500 cruises to more than 400 ports in 98 countries, territories or dependencies around the world. From shorter getaways to 113-day itineraries, the company's cruises visit all seven continents with highlights including Antarctica explorations, South America circumnavigations and exotic Australia/New Zealand and Asia voyages; four annual Grand Voyages; and popular sailings to the Caribbean, Alaska, Mexico, Canada/New England, Bermuda, Europe and the Panama Canal. The line welcomed ms Koningsdam in 2016 and has a as second Pinnacle Class ship, ms Nieuw Statendam, to be delivered in December 2018. A third Pinnacle-class ship, due for delivery in 2021, recently was announced.

The company is undergoing $300 million in brand enhancements to secure its position as the leader in premium cruising. Fleetwide, the ships feature innovative initiatives and a diverse range of enriching experiences focused on destination immersion and personalized travel. Guests can expand their knowledge through an exclusive partnership with O, The Oprah Magazine; during an America's Test Kitchen show; at Explorations Café presented by The New York Times; and by taking a Digital Workshop powered by Windows. Outstanding entertainment fills each evening at venues including Lincoln Center Stage, Billboard Onboard and B.B. King's Blues Club. The dining experience can be savored at a variety of restaurants with menus that feature selections from Holland America Line's esteemed Culinary Council that comprises world-famous chefs who design dishes exclusively for our guests. 
 

Statement from President Trump on Cuban Independence Day

THE WHITE HOUSE

Office of the Press Secretary

FOR IMMEDIATE RELEASE
May 20, 2017
 
Statement from President Donald J. Trump on Cuban Independence Day

 
On Cuban Independence Day, I extend my warmest wishes to the Cuban American community and the people of Cuba as our whole Nation joins you in celebrating the anniversary of Cuban Independence.
 
Americans and Cubans share allegiance to the principles of self-governance, dignity, and freedom.  Today, we remember patriots like José Martí, who devoted himself to making Cuba an economically competitive and politically autonomous nation.  

He reminds us that cruel despotism cannot extinguish the flame of freedom in the hearts of Cubans, and that unjust persecution cannot tamper Cubans’ dreams for their children to live free from oppression.  

The Cuban people deserve a government that peacefully upholds democratic values, economic liberties, religious freedoms, and human rights, and my Administration is committed to achieving that vision.
 
Today, we also honor the generations of Cuban Americans who have made outstanding contributions to our country by sharing their culture and talents.  Cuban Americans have distinguished themselves in literature, the arts, business, sports, the courts, Congress, and within my Administration.  

We are especially thankful to the Cuban Americans who serve in our military and who have sacrificed in defense of our freedom.
 
Melania and I send our best wishes on this important day in history for the Americas.  God bless the people of Cuba and our Cuban American friends who call the United States home.

Southwest Airlines CEO Speaks Of "Pulling The Plug" On Non-Havana Flights

Tampa Bay Business Journal
Tampa, Florida
18 May 2017

By Frances McMorris

After several other airlines recently announced they were cutting back their flights to Cuba, Southwest Airlines, which began flights between Tampa and Havana late last year, is also watching how that new market is doing, said the airline’s chief executive.

“We’re very carefully monitoring our developing markets; Cuba is something we’ll have to continue to watch,” Southwest CEO Gary Kelly, said Wednesday at the carrier’s annual shareholder meeting being held in downtown Phoenix.

“Havana looks like a normal developing market, and the other two cities have very modest traffic demand at this point," he said. "So that’s something we’ll need to continue to watch. I don’t want to pull the plug yet, but the demand is going to have to pick up to sustain those flights.”

Including Havana, Dallas-based Southwest Airlines’ (NYSE: LUV) has three destinations to Cuba.

Southwest's new route between Tampa International Airport and Havana that began December 12 helped drive TIA's Cuba traffic in January up by approximately 10 percent. That traffic has been rising steadily ever since with a nearly 32 percent jump from February through April. In February, traffic for Cuba was 6,968 rising to 9,627 in March and 9,187 in April. Between 2012 and 2015, there has been a 65 percent increase in TIA-Cuba passenger traffic, reaching nearly 37,000 passengers last year.

Just as significant, TIA’s annual revenue from Cuban air traffic rose by 23 percent to $1.4 million for 2016; up from $1.13 million in 2015. In 2014, that revenue was $970,000.

Tampa Bay is home to the third largest Cuban-American population in the country with Cuban ancestry representing one-fifth of Tampa’s Hispanic population. With approximately 170,000 Cuban-American residents in the region, Tampa was one of only 10 U.S. cities to win direct commercial flights to Havana.

However, the pursuit of flights to Cuba by U.S. carriers has seen a dramatic turnaround in recent months.

Consider the decision of Spirit Airlines (Nasdaq: SAVE). In April, the Miramar-based ultra-low-cost carrier said it would end its service between Fort Lauderdale and Havana on May 31.

Then there is Denver-based Frontier Airlines and Fort Lauderdale-based Silver Airways. In March, the two carriers said they would be exiting the Cuba market. Both airlines attributed the change to lower-than-expected demand and over-capacity on routes between Florida and Cuba. Frontier, which also noted high costs, said it would end its daily Miami-Havana service on June 4.

Late last year, Fort Worth-based American Airlines (Nasdaq: AAL) said that starting in February it would reduce the amount of flights to Cuba by 25 percent. American was the second U.S. airline to announce its service to Cuba.

New York-based JetBlue Airways Corp. (Nasdaq: JBLU) was the first airline to announce that it was launching flights between the U.S. and Cuba. Last month, JetBlue filed an application to add more flights between Fort Lauderdale and Havana, and to launch what it says would be the first-ever nonstop service between Boston and Cuba’s capital city. Jetblue’s latest move comes after it said in February that it would be pulling back on its Cuba service.

Officials for the U.S. and Cuba signed a deal last year to restore commercial air service between the two countries for the first time in decades.

In 2014, former President Barack Obama first announced more lenient travel restrictions on traveling to Cuba. He had repeatedly called on the Congress to lift the Cuban embargo. His administration said that authorized travel to Cuba increased by more than 75 percent from 2014 to 2015.

Obama became the first sitting U.S. president to visit Cuba since 1928 when he went there last year. The Tampa Bay Rays also went on that trip, playing a game against the Cuban National baseball team.

Despite the death in December of former Cuban leader Fidel Castro and the easing of trade and travel restrictions under Obama, uncertainty surrounds the future of U.S.-Cuba relations in light of the hard-line campaign rhetoric about Cuba from President Donald Trump.

Will DOT’s Decision About BOS-HAV Flight Signal Trump Administration’s Enforcement Of "People-To-People" Travel?

If the Trump Administration does not object to a request by Jet Blue Airways Corporation (with lesser significance for a United Airlines route request) for a BOS-HAV route, the conclusion by United States companies focusing upon Republic of Cuba travel-related activities will be the Trump Administration is likely to manage its policies and regulatory environment within the context of a commercially-centered holistic approach; unlikely to constrain commercial activities that are operational or those considered tangential to previously-authorized commercial activities while advancing decisions relating to post-24 February 2018 when a new president is inaugurated in the Republic of Cuba.

On 20 April 2017, Long Island City, New York-based JetBlue Airways Corporation (2016 revenues exceeding US$6.4 billion) for the second time requested the United States Department of Transportation (USDOT) to authorize “the first-ever non-stop service between Boston, Massachusetts [Logan International Airport- BOS], and Havana, Cuba [Jose Marti International Airport- HAV]” commencing on 1 November 2017. 

Jet Blue Airways Corporation had first requested the route on 2 March 2016.  The once-per-week flight, using a 162-seat Airbus A-320 aircraft, would operate on Saturdays with departure at 9:45 am and arrival at 1:45 pm.  The request by Jet Blue Airways Corporation to the USDOT was to transport “persons, property and mail.”

If the once-per-week flight operated at capacity on an annual basis, the service would transport 8,424 passengers.  Approximately 10,000 individuals of Cuban decent reside in the Commonwealth of Massachusetts. 

If the USDOT grants the request by Jet Blue Airways Corporation, given the low number of potential passengers of Cuban descent, the service would be overwhelmingly focused upon “people-to-people” and “educational activities” given the large number of educational institutions located in Massachusetts, New Hampshire, Vermont, and northern Connecticut that would use BOS as a departure point to HAV.  

NOTE: On 5 May 2017, Chicago, Illinois-based United Airlines, Inc. (2016 revenues exceeded US$36.6 billion) requested the USDOT to authorize a once-weekly flight from George Bush Intercontinental Airport (IAH) to HAV to daily service commencing on 28 October 2017 using aircraft with capacity of 70 seats to 160 seats; representing an annual at-capacity range of 25,550 to 58,400 passengers.  IAH is a hub for United Airlines; there are approximately 50,000 individuals of Cuban descent residing in the state of Texas.

During the Obama Administration and continuing through the first months of the Trump Administration, Members of Congress, White House staff, employees at the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and U.S. Customs and Border Protection (CBP) of the Department of Homeland Security (DHS), determined that there was and remains considerable abuse of the “people-to-people” and “educational activities” provisions relating to authorized travel.

Airlines require authorization(s) from the USDOT to service new routes.  Cruise lines do not require additional authorizations from the United States Department of State, USDOT, OFAC or United States Department of Commerce to change their schedules.

As of 10 May 2017, the three largest united states cruise lines could deliver 357,000 passengers during 211 sailings to the Republic of Cuba in 2017/2018/2019, earning gross revenues of US$422 million; with US$50 million spent by passengers in Cuba and approximately US$13 million in port fees to the Republic of Cuba.  Additional itineraries are expected to be announced soon.  And, smaller cruise lines are also operating in the Republic of Cuba marketplace.  

However, while airlines and cruise lines are increasing or seeking to increase their United States-Republic of Cuba schedules, the second hotel in the Republic of Cuba to be managed by a United States-based company has delayed its transfer from December 2016 to December 2017 to December 2019. 

An article published by The New York Times on 10 May 2017, "Cuba's New Luxury Hotels Look to Lure Waves of U.S. Tourists" referenced that the Hotel Inglaterra in the city of Havana, Republic of Cuba, will not transition to management by Stamford, Connecticut-based Starwood Hotels & Resorts Worldwide (a subsidiary of Bethesda, Maryland-based Marriott International) until December 2019No reason(s) have been provided for the thirty-six (36) month delay.  Starwood Hotels & Resorts International commenced management of the Sheraton Four Points Havana in June 2016.

OFAC Regulations

“OFAC has issued general licenses within the 12 categories of authorized travel for many travel-related transactions to, from, or within Cuba that previously required a specific license (i.e., an application and a case-by-case determination).  

Travel-related transactions are permitted by general license for certain travel related to the following activities, subject to the criteria and conditions in each general license: family visits; official business of the U.S. government, foreign governments, and certain intergovernmental organizations; journalistic activity; professional research and professional meetings; educational activities; religious activities; public performances, clinics, workshops, athletic and other competitions, and exhibitions; support for the Cuban people; humanitarian projects; activities of private foundations or research or educational institutes; exportation, importation, or transmission of information or information materials; and certain authorized export transactions. 

“OFAC has issued a general license that incorporates prior specific licensing policy and authorizes, subject to conditions, travel-related transactions and other transactions that are directly incident to people-to-people educational activities in Cuba. Among other things, this general license authorizes, subject to conditions, persons subject to U.S. jurisdiction to engage in certain educational exchanges in Cuba either individually or under the auspices of an organization that is a person subject to U.S. jurisdiction and sponsors such exchanges to promote people-to-people contact. Travelers utilizing this general license must ensure they maintain a full-time schedule of educational exchange activities intended to enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities, and that will result in meaningful interaction between the traveler and individuals in Cuba. The predominant portion of the activities must not be with a prohibited official of the Government of Cuba, as defined in 31 CFR § 515.337, or a prohibited member of the Cuban Communist Party, as defined in 31 CFR § 515.338.  

For travel conducted under the auspices of an organization, an employee, paid consultant, or agent of the sponsoring organization must accompany each group traveling to Cuba to ensure that each traveler has a full-time schedule of educational exchange activities. In addition, persons relying upon this authorization must retain records related to the authorized travel transactions, including records demonstrating a full-time schedule of authorized activities. In the case of an individual traveling under the auspices of an organization that is a person subject to U.S. jurisdiction and that sponsors such exchanges to promote people-to-people contact, the individual may rely on the entity sponsoring the travel to satisfy his or her record-keeping obligations with respect to the requirements described above.  

For UPDATED JANUARY 6, 2017 5 a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.565(b).  

What is an “organization” in the people-to-people context? In the people-to-people context, an organization is an entity subject to U.S. jurisdiction that sponsors educational exchanges that do not involve academic study pursuant to a degree program and that promote people-to-people contact. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.565(b).”

Related Blog Post:

http://www.cubatrade.org/blog/2017/4/22/what-does-jetblue-know-or-doesnt-know-seeking-additional-routes-to-cuba

 

Wyndham’s Super 8 Worldwide Will Not Manage Resort Property In Cuba

Parsippany-Troy Hills, New Jersey-based Super 8 Worldwide, a subsidiary of Parsippany, New Jersey-based Wyndham Worldwide was to replace Ile-de-France, France-based AccorHotels as the management contract holder for the Playa de Oro Hotel in Varadero, Republic of Cuba, owned by Republic of Cuba government-operated Grupo Hotelero Gran Caribe.  Super 8 Worldwide was expected to commence operations in April 2017.

The management contract was reportedly through a Quebec, Canada-based consortium within which one of the members has a partnership with Wyndham Worldwide brands operating in Canada.

Wyndham Worldwide has not reported if the company obtained (or required) a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury to manage a property(s) in the Republic of Cuba.  Licenses from the OFAC are generally valid for two (2) years.

For reasons that neither Wyndham Worldwide nor Grupo Hotelero Gran Caribe have disclosed, the companies reportedly terminated the management contract and/or discussions for a management contract and Grupo Hotelero Gran Caribe has decided to self-manage the property.  Uncertain as to which party initiated the discussion relating to the termination.

If accurate, the only United States-based hotel brand with a presence in the Republic of Cuba is Stamford, Connecticut-based Starwood Hotels & Resorts Worldwide (a subsidiary of Bethesda, Maryland-based Marriott International) which manages The Hotel Quinta Avenida (re-branded as Four Points Sheraton Havana on 27 June 2016), expects to manage the Hotel Inglaterra (delayed from December 2016 to December 2019), and had reported a Letter of Intent to manage a third property, the Hotel Santa Isabel, but no information has been provided about that property since 2016.  

If the OFAC issued a license to Starwood Hotels & Resorts/Marriott International in 2016, it would generally expire in two (2) years; thus, if OFAC issued a revised license on or before 20 January 2017, the license would generally expire prior to December 2019.  There is a possibility that the OFAC provided a license of indefinite length.

The decision by Grupo Hotelero Gran Caribe may be a result of the company believing that whatever marketing and operational value Wyndham Worldwide would deliver was not worth the management fee(s) that would be paid to Wyndham Worldwide.  More likely, however, is given the low demographic guest profile for the Playa de Oro Hotel, Grupo Hotelero Gran Caribe believes that guests will continue to be attracted to a low-cost vacation opportunity regardless of the increased guest experience (and personnel training opportunities) that would result from a management contract with Wyndham Worldwide.  

In addition, with the government of the Republic of Cuba’s chronic shortage of foreign exchange, saving the management fee was enticing from a financial perspective.  There is also a belief by Grupo Hotelero Gran Caribe that another non-Republic of Cuba-based hotel management will be attracted to the property whenever it becomes available for a management contract.  Another issue for non-Republic of Cuba-based hotel management companies is the desire by the government of the Republic of Cuba for hotel management contracts to include a provision that the holder of the hotel management contract will provide financing for the property; a provision that most hotel management companies reject.

An anomaly to the Republic of Cuba hotel management marketplace is a requirement for those non-Republic of Cuba-based companies with a management contract to obtain their operating funds from the owner of the property, rather than directly from guests into an operating account controlled by the holder of the management contract.  Due to the government of the Republic of Cuba's chronic shortage of foreign exchange, it desires immediate access to funds and then distributes payments, as required by a management contract, but often delayed, to the holder of the management contract.  This is an unsustainable financial management modality.  

From the company: "Super 8 ® Worldwide is the world's largest economy lodging chain with over 2,200 properties in the U.S., Canada and China.  Super 8 has recently launched a brand refresh with a new logo and a fresh, new interior and exterior design program.  Guests can depend on every Super 8 to deliver a complimentary SuperStart breakfast, free high-speed Internet access, upgraded bath amenities, free in-room coffee and free premium cable or Satellite TV.  Kids under 17 stay free at Super 8."

In September 2016, Geoff Ballotti, President and Chief Executive Officer of Wyndham Worldwide:

“We are working on opportunities there,” Loewen said. “Our teams have been there. We have partners that we’re talking to. We’re looking to bring some more brands there. We’ve talked both to people who want the upscale side and some who really see the need for good solid economy hotels.” The biggest challenge, of course, is utilities and other infrastructure. “The government’s got a lot of work to do down there, I think. But it will be a great location.” 

Mr. Robert Loewen, Executive Vice President And Chief Operating Officer of Wyndham Worldwide:

"We always look at every opportunity, and we think Cuba and the Caribbean in general are going to be big opportunities. I’m excited from a personal standpoint because 25 years ago I worked in the Caribbean doing yacht charters. And every year, it was a story of, 'Cuba’s going to open up, and we can finally take sailboats to Cuba.' It looks like it’s finally broken down and is opening up, and the infrastructure is not there."

In May 2016, Hollywood, Florida-based RCI (a subsidiary of Wyndham Worldwide), reported that it would offer travel options to the Republic of Cuba for its timeshare owners.

"RCI is the worldwide leader in vacation exchange with approximately 4,300 affiliated resorts in more than 100 countries. RCI pioneered the concept of vacation exchange in 1974, offering members increased flexibility and versatility with their vacation ownership experience. Today, through the RCI Weeks® program, the week-for-week exchange system, and the RCI Points® program, the industry’s first global points-based exchange system, RCI provides flexible vacation options to its 3.8 million RCI subscribing members each year. RCI’s luxury exchange program, The Registry Collection® program, is the world’s largest program of its kind with approximately 200 affiliated properties either accessible for exchange or under development on six continents. RCI is part of Wyndham Destination Network and the Wyndham Worldwide family of brands (NYSE: WYN)."

LINKS TO WYNDHAM-RELATED BLOG POSTS:

http://www.cubatrade.org/blog/2017/2/11/wydham-worldwides-super-8-worldwide-replaces-accor-to-manage-cuba-property?rq=wyndham

http://www.cubatrade.org/blog/2016/10/20/wyndham-worldwide-actively-seeking-management-opportunities-in-cuba?rq=wyndham

http://www.cubatrade.org/blog/2016/12/28/seeking-better-roi-cuba-hospitality-companies-to-become-landlords-rather-than-managers?rq=wyndham
 

Nestle got Cuban coffee for Nespresso.  Will Nestle get Cuban coffee for Haagen-Dazs, Dreyer’s & Edy’s? 

Could green coffee beans from the Republic of Cuba be imported directly to the United States and then roasted, processed and distributed to flavor ice cream for these brands (and potentially others- see images below)?  

365 (owned by Texas-based Whole Foods)
Ben & Jerry's (Vermont-based; owned by United Kingdom-based Unilever)
Haagen-Dazs (owned by Minnesota-based General Mills; distributed by Nestle)
Breyers (New Jersey-based; owned by United Kingdom-based Unilever)
Starbucks (owned by Washington-based Starbucks Corporation)
Dreyer's (California-based; owned by Nestle)
Straus (owned by California-based Straus Family Creamery)
Blue Bell (owned by Texas-based Blue Bell Creameries)
Edy's (California-based; owned by Nestle)

Or, will the green coffee beans be transported 5,000 miles from the Republic of Cuba to Switzerland and roasted and/or transformed into extract for flavoring before another 5,000-mile (or more) return journey to the United States? 

Thus far, Republic of Cuba government-operated Cubaexport, which manages the export of some agricultural products (including coffee and charcoal- which was directly exported to the United States in 2017), has declined authorize a United States-based company to directly import green coffee beans, despite the bilateral commercial interest, bilateral commercial value and bilateral political benefit.

Not lost on management of United States-based companies is a preference by the government of the Republic of Cuba to permit a non-United States-based company to do first what in 2016 the Obama Administration authorized United States-based companies to do with respect to the direct importation of agricultural commodities from the Republic of Cuba.

One reason, perhaps the reason, is the role of Vevey, Switzerland-based Nestle SA (2016 revenues approximately US$94 billion) in the economy of the Republic of Cuba.

The likely first beneficiaries for Cuban coffee-infused ice creams are Oakland, California-based Dreyer’s Grand Ice Cream Holdings, Inc., and Oakland, California-based Edy’s Grand Ice Cream which are wholly-owned by Nestle SA; and Oakland, California-based Haagen-Dazs which is distributed by Nestle SA.

Nestle SA is positioning itself to be an importer to the United States of confections, coffee, ice cream, beverages, and other consumables sourced in the Republic of Cuba.  

Nestle SA has a multi-decade interest in the Republic of Cuba.  The company has a representative office in the city of Havana.  Since the 1990's, Nestle S.A. has been involved with Republic of Cuba government-operated companies to develop the confection industry (a twenty-year joint venture producing ice cream); has investments in bottled water production (Ciego Montero) and beverage production; and imports products for sale at retail stores.  In 2014, Nestle Nespresso released “Limited Edition Cubanía; Inspired by the passion and intensity of Cuban coffee ritual” that did not contain coffee from the Republic of Cuba.  In 2016, "Cuban Nespresso Grand Cru Cafecito de Cuba" capsule (which would include coffee from the Republic of Cuba) was to be available outside of the United States, but with the 22 April 2016 changes in United States regulations, the opportunity was created to add the United States to global distribution channels.

In 2017, Nestle SA reported the company would invest approximately US$55 million to create a joint venture (of which it will own 51%) potentially employing 300 Republic of Cuba nationals to source ingredients for and to produce coffee, biscuits and cooking products.  Completion date is by 2019.  Other Nestle SA production facilities are being considered for expansion.

Expect the soon-to-open Gran Hotel Kempinski Manzana La Habana, managed by Geneva, Switzerland-based Kempinski Hotels SA, the first property in the Republic of Cuba to likely earn a four or five rating from AAA and/or Forbes Travel Guide, to serve guests products (nightly turn-down service including chocolates on pillows?) from Switzerland and, specifically from Nestle SA.  It's first guests will check-in on 31 May 2017. 

NOTE: In the 1990’s, Mr. Ian Delaney, then-Chairman of Toronto, Canada-based Sherritt International, which at the time was aggressively diversifying throughout the Republic of Cuba- mining, oil, natural gas, hospitality, agriculture, etc., as the largest source of Direct Foreign Investment (DFI) in the country, shared that the company would become the “Canadian Pacific” of the Republic of Cuba, referencing the transcontinental commercial, economic and political impact of the diversified conglomerate.  The remark was negatively-interpreted by the government of the Republic of Cuba; as it represented ghosts of the pre-1959 presence in the Republic of Cuba by United States-based companies.  Sherritt International has since relinquished some of its holdings; and no longer envisions (or is envisioned has having) the depth of influence its then-chairman had forecasted for the company. Nestle SA is unlikely to suffer from the “Canadian Pacific” comparative narrative.

Unilever Plc And Cuba

In November 2016, London, United Kingdom-based Unilver Plc (2016 revenues approximately US$65 billion) commenced construction on a joint venture (of which it will own 60%) facility valued at US$35 million in the Republic of Cuba to produce soap, detergent, deodorant and toothpaste.  Production is scheduled to commence in 2018.  Unilever had a joint venture in the Republic of Cuba from the mid-1990's until 2012 when it ended due to operational disagreements.  The company continued to export products to the Republic of Cuba.  

Nespresso

In 2016, the Obama Administration added coffee to the list of eligible imports from the Republic of Cuba.  To be eligible for importation into the United States, a listed Cuban Assets Control Regulations (31 CFR Part 515) Section 515.582 product (in this case coffee) must be “produced by independent Cuban entrepreneurs, as demonstrated by documentary evidence.”

From the United States Department of State: “Persons subject to US jurisdiction engaging in import transactions involving goods produced by an independent Cuban entrepreneur pursuant to 515.582 must obtain documentary evidence that demonstrates the entrepreneur's independent status, such as a copy of a license to be self-employed issued by the Cuban government, or in the case of an entity, evidence that demonstrates that the entity is a private entity that is not owned or controlled by the Cuban government.”

In 2016, New York, New York-based Nestle Nespresso USA, Inc., a subsidiary of Nestle SA, purchased a container of approximately eighteen (18) tons of green coffee beans through London, United Kingdom-based Cubana Coffee & Roastery (www.cubana.co.uk), the established bar-restaurant and coffee roasting group, and London, United Kingdom-based The Cuba Mountain Coffee Company Ltd (www.almacuba.com).  

The green coffee beans were sourced from the 2015-2016 harvest in the Republic of Cuba; the value was approximately US$5,000.00 per metric ton, or approximately US$90,000.00.  

The beans were roasted at Nestle Nespresso facilities in Avenches and nearby Orbe, Switzerland.  With approximately 20% lost during the roasting process, the result was approximately 180,000 capsules per ton- 3,240,000 limited edition Cafecito de Cuba capsules (approximately 5 to 6 grams each or .17 to .21 ounces).  The price for a limited-edition capsule was approximately US$1.10, so potential total revenue could be approximately US$3,564,000.00.

Nestle Nespresso USA, Inc., has obtained additional green coffee beans from the 2016-2017 harvest in the Republic of Cuba and continues to produce capsules for distribution throughout the world, including in the United States.
 

Cruise Lines: 357,000 Passengers; US$422 Million In Gross Revenues; US$63 Million To Cuba; US$110 Million To Airlines; US$45 Million To Hotels & Restaurants In Florida

As Of 10 May 2017, The Three Largest United States Cruise Lines Could Deliver 357,000 Passengers During 211 Sailings To Cuba In 2017/2018/2019; US$422 Million In Gross Revenues; US$50 Million Spent By Passengers In Cuba; Port Fees To Cuba US$13 Million.  United States Airlines US$110 Million; South Florida Hotels & Restaurants US$45 Million

The three (3) largest United States-based cruise lines have announced more than 211 itineraries for the 2017, 2018 and 2019 sailing seasons which include the Republic of Cuba.  Additional itineraries are expected to be announced soon.  And, smaller cruise lines are also operating in the Republic of Cuba marketplace.  

Do they know what others don’t know?  Or, are they walking a proverbial plank?  Are the three CEO’s: Mr. Frank J. Del Rio (Miami, Florida-based Norwegian Cruise Lines Holdings Ltd), Mr. Arnold W. Donald (Miami, Florida-based Carnival Corporation & plc) and Mr. Richard D. Fain (Miami, Florida-based Royal Caribbean Cruises Ltd) presenting a dare to the President of the United States or enticing the President’s corporate salivary gland?

In 2016, the three cruise lines combined operated a fleet of approximately 144 vessels, managed approximately 14 brands, earned approximately US$28.8 billion in gross revenues, and employed approximately 218,000 men and women.

If each vessel sails at capacity, a total of more than 357,000 passengers will visit the Republic of Cuba from 2017 through 2019.

The gross revenues to the cruise lines from the 211 Republic of Cuba sailings would be projected to exceed US$422 million from 2017 through 2019.

The 357,000 passengers would be projected to spend approximately US$50 million in the Republic of Cuba [approximately US$140.00 per person in expenditures and organized/non-organized excursions including cost(s) for tour(s), meals (government-operated and privately-operated), ground transportation (privately-operated classic car tours), sundries and souvenirs (including spirits, coffee, tobacco, artwork and crafts)].  

Vessel port charges in the Republic of Cuba may exceed US$13 million, ranging up to approximately US$79,000.00 for the largest vessels (684-passenger to 2,052-passenger).

United States-based airlines may benefit from gross revenues of more than US$110 million from transporting passengers to/from Florida in conjunction with the cruise schedules.  Hotels and restaurants in South Florida could benefit from an additional US$45 million in gross revenues from guests arriving for and/or departing from cruises.

Click Here For Link To Previous Analysis

U.S. Food/Ag Exports To Cuba Increased 142% In March 2017

ECONOMIC EYE ON CUBA©
May 2017

March 2017 Food/Ag Exports To Cuba Increased 142% - 1
Healthcare Product Exports Were US$865,949.00- 2
Humanitarian Donations Were US$373,237.00- 3
Obama Administration Initiatives Product Exports- 3
U.S. Port Export Data- 14

MARCH 2017 FOOD/AG EXPORTS TO CUBA INCREASED 142%- Exports of food products & agricultural commodities from the United States to the Republic of Cuba in March 2017 were US$25,018,148.00 compared to US$10,332,130.00 in March 2016 and US$33,207,087.00 March 2015. 

LINK TO COMPLETE REPORT

Starwood/Marriott Now Reporting 36-Month Delay To Manage Hotel Inglaterra; No Reason(s) Provided

An article published by The New York Times on 10 May 2017, "Cuba's New Luxury Hotels Look to Lure Waves of U.S. Tourists" referenced that the Hotel Inglaterra in the city of Havana, Republic of Cuba, will not transition to management by Stamford, Connecticut-based Starwood Hotels & Resorts until December 2019.  

In March 2016, the company reported that the property would be under management in December 2016; recently, the company reported that the property would be under management in December 2017.  No reason(s) have been provided for the thirty-six (36) month delay.

Link To NYT Article: https://www.nytimes.com/2017/05/09/realestate/commercial/cubas-new-luxury-hotels-look-to-lure-waves-of-us-tourists.html?_r=0

Previous USCTEC Blog Post Link:  
http://www.cubatrade.org/blog/2017/2/6/q3ahdoicr1362pc5w0r4xaxb1rh5os?rq=starwood

Stamford, Connecticut-based Starwood Hotels & Resorts Worldwide (a subsidiary of Bethesda, Maryland-based Marriott International), is scheduled to open the Hotel Inglaterra on 1 December 2017 in the city of Havana, Republic of Cuba.  The Hotel Inglaterra will be amongst the company's 122-property The Luxury Collection.

On 16 March 2016, Starwood Hotels & Resorts Worldwide reported that the company would in 2016 manage two (2) properties in the Republic of Cuba- the Hotel Quinta Avenida (re-branded as Four Points Sheraton Havana on 27 June 2016) and Hotel Inglaterra; and had signed a Letter of Intent to manage a third property, Hotel Santa Isabel. 

No reason(s) has been provided for the twenty-one month delay in implementing the management contract for the Hotel Inglaterra or the signing of a management contract for the Hotel Santa Isabel.

"HAVANA--(BUSINESS WIRE)-- Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”) (NYSE:HOT) today signed three new hotel deals in Cuba, marking the first U.S. based hospitality company to enter the market in nearly 60 years. This announcement follows receipt of authorization from the U.S. Treasury Department for Starwood to operate hotels in Cuba. Long-time Havana icon, Hotel Inglaterra, will join The Luxury Collection and Hotel Quinta Avenida will become a Four Points by Sheraton. Both hotels will undergo renovations before raising their new brand flags later in 2016. The Company also announced that it has signed a Letter of Intent to convert the famed Hotel Santa Isabel into a member of The Luxury Collection."

The three properties to be managed by Starwood Hotels & Resorts Worldwide are owned by Republic of Cuba government-operated Gaviota SA., controlled by Republic of Cuba government-operated Grupo de Administracion Empresarial S.A. (Enterprise Management Group), or GAESA, which is, in turn, controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR).

Marriott International, before acquiring Starwood Hotels & Resorts Worldwide, reported in 2016 that it was exploring property management opportunities in the Republic of Cuba.
 

Acting Assistant Secretary Of State Doesn’t Mention Cuba In Speech… But, Is Expansive During Comments

Excerpts of remarks….

Western Hemisphere: Remarks for the Council of the Americas Conference: Americas Outlook

Remarks
Francisco Palmieri, Acting Assistant Secretary, Bureau of Western Hemisphere Affairs
U.S. Department of State
Washington, DC
May 9, 2017

As Prepared

Good afternoon. Thank you so much to Susan and Eric and the rest of the Council for this opportunity. It is a privilege to be with you today for the 47th Washington Conference of the Americas.

For the nearly 50 years you have held this conference, the Council has underscored what we also know to be true: the Western Hemisphere is and always will be a top priority for the United States.

Strong Bonds, Shared Vision

And, as you know well, the Americas are home to some of the most important markets for our companies.
Strong and healthy regional economies are good for both the United States and for our hemisphere.

That’s why this Administration is committed to expanding security and fostering economic growth in the region.

The Americas represent a key market for U.S. exports. Fortunately for us, the United States is the preferred business partner for most countries in the Western Hemisphere.

Nearly half of all goods and services exported from the United States – $669 billion worth – go north and south. That’s three times more than what we export to China, Japan, and India combined.

With the hemisphere, we are supporting the President’s four trade priorities: promoting U.S. sovereignty; enforcing U.S. trade laws; leveraging U.S. economic strength to expand our goods and services exports; and protecting U.S. intellectual property rights.

We are reviewing existing trade agreements and negotiating new bilateral ones to ensure the benefits to the United States are clear.

Beyond Trade

But, our work together expands beyond trade agreements.

We are also supporting entrepreneurs; fostering innovation; and supporting education.

We understand that for you to do business, we must work to facilitate legitimate trade and travel between the U.S. and the Hemisphere.

Eastern Caribbean

In the Caribbean, we also have strong ties. The United States is the primary trading partner for this region. We had a $4.6 billion trading surplus for the United States in 2016.

However, there are also risks – rising crime and endemic corruption threaten the stability of governments and deprive citizens of their basic rights to security and good governance.

In the Eastern Caribbean, we are focused on dismantling transnational criminal organizations and bolstering police professionalization.

We also promote U.S. exports and support opportunities for the private sector to invest

We focus, for example, on increasing the use of reliable, low-cost sources of energy to help spur economic development and create new opportunities for U.S. companies.

Conclusion and Thanks

We have a busy schedule ahead of us in the Hemisphere.

The United States is committed to engaging with the region based on shared priorities that are vital to the interests of our respective countries.

As business leaders and government officials who follow this Hemisphere, I thank you for your continued partnership and look forward to pressing ahead alongside you.

Excerpts From Reporting By EFE
9 May 2017

US President Donald Trump's policy toward Havana will have "significant differences" over his predecessor, Barack Obama, especially through a "greater emphasis" on human rights within the island, a senior official said Tuesday Of the State Department in Washington, reports EFE.

Trump's government is still immersed in the "comprehensive review" of US policy toward Havana that began after it came to power in January, recalled US Assistant Secretary of State for Latin America Francisco Palmieri.

"As we move forward in this review, I suspect that important differences will emerge in how this government plans to confront the situation in Cuba (compared to the previous administration)," added Palmieri during the Conference of the Americas held annually at the State Department.

"One of the areas that will be a high priority will be to ensure that Cuba makes more substantial progress towards greater respect for human rights in the country, which is certainly an area where we will make greater emphasis when the review is completed,” concluded the official.

The review refers to the process of normalization of bilateral relations initiated by former President Barack Obama in late 2014, including the decision to withdraw Cuba from the State Department's list of states sponsoring terrorism that involves the imposition of sanctions.

In early February, White House spokesman Sean Spicer said the Trump government will prioritize human rights in its "complete review" of US policy toward Cuba.

Since then there has been little news of progress in this review, and no contact has been reported between the Trump Government and General Raul Castro.

During the primary election process in 2015 and 2016 in the United States, Trump was the only Republican candidate for president who supported the policy of opening-up to the Raul Castro government.

But in his search for votes in Florida in the general election, Trump promised to "repeal" President Barack Obama's executive measures "unless the Castro regime" restored "freedoms on the island."

The president seems to have approached the hard line towards Cuba of other members of his party, like Republican Senator Marco Rubio, who this Tuesday encouraged Trump to "recalculate the concessions that have been made to the Cuban dictatorship," During another address at the Conference of the Americas.

LINK TO: Chronology Of Statements About Cuba From The White House

 

Delta Air Lines Opposing Everyone Requesting US-Cuba Routes

Excerpt From Delta Air Lines Filing With United States Department Of Transportation

“We understand that 21 weekly round-trip frequencies to Havana will become available following Frontier’s and Spirit’s termination of their current U.S.-Havana service. As of today, American, Delta, FedEx, JetBlue, Southwest, and United have filed applications requesting a total of over 35 weekly frequencies. Delta objects to the applications filed by American, FedEx, JetBlue, Southwest, and United to the extent that any grant to them would preclude Delta’s own application for seven weekly frequencies to provide additional service on the Miami-Havana route. Although Delta believes that its proposal would provide superior public benefits to the other proposals, in light of the competing applications and responsive pleadings filed, we would support a decision by the Department to institute a frequency allocation proceeding in this matter.”

Complete Text Of Filing

American Airlines... Brief, To The Point: Opposing Delta, JetBlue & Southwest

Excerpt From American Airlines Filing With United States Department Of Transportation

“American, Delta, JetBlue, and Southwest have filed applications requesting a total of 28 weekly U.S.-Havana frequencies, when only 21 frequencies will become available following Frontier’s and Spirit’s termination of their U.S.-Havana services. American therefore objects to the applications filed by Delta, JetBlue, and Southwest for additional U.S.-Havana frequencies, to the extent that the Department’s granting any of those applications precludes the Department’s grant of American’s application for seven weekly U.S.-Havana frequencies.”

Complete Text Of Filing

Southwest Airlines Opposing JetBlue Airways, American, Delta US-Cuba Route Applications

Excerpt From Southwest Airlines Filing With United States Department Of Transportation

“Southwest Airlines Co. (Southwest) files this Consolidated Answer in response to (1) the Applications of JetBlue, American, and Delta for an allocation of U.S. – Havana frequencies, and (2) the motion of JetBlue to institute a new, formal proceeding to determine how three soon-to-be-available U.S. – HAV frequencies should be allocated.

Southwest filed an application on April 25, 2017, for one of three daily U.S. - Havana (HAV) frequencies that will become available when Spirit and Frontier terminate their HAV service in the coming months, as they have previously announced.  With this frequency, Southwest will provide one additional daily flight between Fort Lauderdale (FLL) and HAV, for a total of three daily flights in this market. JetBlue filed an application for six weekly frequencies between FLL and HAV plus a Saturday-only BOS-HAV flight, while American and Delta each filed applications for one daily frequency for MIA – HAV service. Together, the four applicants are requesting four daily HAV frequencies whereas only three are available. Southwest opposes each of the other applications to the extent they would prevent an allocation of the one daily frequency requested in Southwest’s Application.

As detailed below, Southwest’s fares and service in the FLL – HAV market set it apart among applicant carriers and show conclusively that Southwest merits an additional HAV frequency. Among the four applicants, Southwest offers consumers by far the lowest FLL/MIA - HAV fares. A snapshot of each applicant carrier’s website for FLL/MIA – HAV fares shows that Southwest is offering significantly lower fares than the lowest fares of JetBlue, American and Delta at three different purchase dates: eight weeks, two weeks and one week from the flight departure date (Exhibit WN-1).

As shown above, eight weeks before the travel date, Southwest’s lowest available website fare is 55% below JetBlue’s lowest offered website fare, 52% below American’s and 34% below Delta’s. For travel two weeks and seven days before the date of travel, Southwest fares are also substantially lower than the comparable JetBlue, American and Delta fares for FLL/MIA-HAV travel.

In addition, Southwest currently operates by far the largest aircraft between FLL/MIA and HAV with its 175 seat 737-800 aircraft (Exhibit WN-2). Others vary from 150 seats operated by JetBlue, to 160 seats operated by Delta and American. This gives Southwest a 17% size advantage over JetBlue and 9% over American and Delta.

Southwest thus achieves the greatest output per frequency utilized, i.e., it makes the most productive use among the four applicants of the limited HAV frequencies available. Further, Southwest is one of the only applicants that has consistently served every one of its U.S. – Cuba markets with no reduction(s) in frequency or seat capacity.

When the service records of the four applicant carriers are compared side-by-side and considered against the DOT’s decisional criteria, it is clear that Southwest will make better use of an additional HAV frequency more than any other applicant. Adding an additional FLL – HAV flight will enable Southwest to continue its successful development of the HAV market, bring enormous value to U.S. consumers, and maximize public benefits.

JetBlue now comes before the Department to request a grant of one more FLL- HAV frequency so it can restore the seat capacity it surrendered voluntarily when it down-gauged its airplane on this route. JetBlue dropped 650 seats in its schedule per week and now seeks to add back 972 seats by operating another frequency. If JetBlue were simply to reinstate its original aircraft on its FLL – HAV flights, it could provide 90% of the seats it would gain by acquiring an additional frequency.  Under these circumstances, JetBlue certainly does not warrant a scarce FLL –  HAV frequency before Southwest, if at all.

American was awarded four daily frequencies for MIA-HAV service. No other carrier received an allocation of more than two South Florida (FLL and MIA) – Havana daily frequencies (Exhibit WN-5). For all of the reasons in Southwest’s pleadings and exhibits filed in the previous allocation proceeding, American should not be awarded a fifth frequency for MIA service before Southwest obtains its third frequency for FLL-HAV service. Importantly, Southwest offers much lower fares than American in the South Florida – HAV market. In fact, American’s lowest website fares are approximately double Southwest’s comparable fares for the eight week, two week and one week booking windows shown in Exhibit WN-1. As the Department has recognized, sustained low fares are critical to developing the fledgling HAV market and meeting the needs of the large Cuban-American population in South Florida.  Increasing Southwest’s FLL–HAV frequencies from two to three daily flights will enable it to compete even more effectively against American and continue to restrain its high-fare MIA-HAV pricing.

Further, as the leading U.S. low cost carrier, Southwest is best positioned to step in and replace the low cost carrier service being discontinued by Spirit and Frontier in the FLL/MIA – HAV market, the majority of which was from FLL. Accordingly, allocating one of these frequencies to American at MIA before Southwest at FLL would undermine the competitive structure the Department carefully created for South Florida in its previous allocation decision.

As one of the highest fare carriers in the South Florida – HAV market, Delta’s current daily service provides no consumer fare benefits. As such, its MIA service does nothing to discipline American’s high fare legacy carrier pricing. In fact, in two of the three booking windows Southwest reviewed on carrier websites, Delta’s fare was higher than American’s (Exhibit WN-1). In contrast, as shown in the earlier frequency allocation proceeding, American   reduces   its   fares   significantly   in   response  to competition from Southwest.  Further, as discussed in Southwest’s earlier pleadings,

Delta has an insignificant presence at MIA and lacks connecting options. Southwest is more than twice as large at FLL as Delta is at MIA and Southwest’s FLL service would connect to 27 U.S. points with a third daily frequency, dwarfing Delta’s five connecting points with two daily frequencies (Exhibit WN-6). Based on a totality of factors, Delta’s MIA-HAV proposal is inferior to Southwest’s proposal and certainly should not deprive Southwest of an additional frequency to provide low-fare FLL – HAV service.

Southwest opposes JetBlue’s motion for the Department to institute a formal frequency allocation proceeding. While JetBlue cites the Ashbacker case in support of its motion, the Ashbacker doctrine does not require the new, formal proceeding that JetBlue envisions.  Instead, Ashbacker stands for the proposition that where bona fide applications are mutually exclusive, an applicant must be provided with the “opportunity to show that its [application] will better serve the public interest than will the [competing application].”

Here, the current process governed by the Department’s Rules of Practice will enable the Department to contemporaneously evaluate the merits of each of the applicants’ service proposals and make a comparative selective decision.  As Southwest has done in this Consolidated Answer, each applicant has the opportunity to respond to each other carrier’s application in the normal course of filing answers and other pleadings under the Department’s procedural rules.  There is no need for the   DOT to institute a new, formal proceeding to ensure contemporaneous consideration of all applications, and indeed such a separate proceeding would cause unnecessary delay in the Department’s allocation decision. Moreover, all four of the current applicants submitted voluminous pleadings in support of HAV frequencies over the exact same routes being proposed here in the Department’s 2016 allocation proceeding, thereby ensuring that the record is already extremely well developed. Together, all these factors make the institution of a separate, formal proceeding unnecessary and an inefficient use of both Department and applicant resources.

For the reasons stated above and in its pleadings in the Department’s earlier allocation proceeding, Southwest respectfully requests that the Department grant it one daily frequency to provide an additional FLL – HAV flight. This additional service will maximize public benefits by enhancing competition and providing low-cost travel options for U.S. - Cuba passengers. Southwest objects to the applications of JetBlue, American and Deltatotheextentthey wouldprecludetherequestedfrequency allocationto  Id. at 328.”

Complete Text Of Filing

JetBlue Opposes Delta, American and Southwest US-Cuba Route Applications

Excerpts Of JetBlue Airways Submission To United States Department Of Transportation

“JetBlue submitted an application on April 20, 2017, for seven weekly frequencies to supplement its existing Havana service. This was followed by applications from Delta, American and Southwest. Four carriers have now submitted applications collectively seeking 28 weekly United States-Havana frequencies. 

Because only 21 weekly frequencies will become available after Spirit and Frontier terminate service to Havana, JetBlue hereby moves the Department, in accordance with the Ashbacker doctrine, to institute a frequency allocation proceeding to allocate the available frequencies. JetBlue’s service proposal, involving non-stop service between Boston and Havana and additional service between South Florida and Havana, will maximize public benefits and is superior to the competing proposals submitted by Delta, American and Southwest. JetBlue looks forward to demonstrating to the Department why the public benefits and attributes

of its service proposal make it the most deserving applicant for additional United States-Havana frequencies.

JetBlue opposes the applications of Delta, American, and Southwest to the extent they preclude contemporaneous consideration of JetBlue’s own application for United States-Havana frequencies. 

JetBlue also opposes Delta’s motion requesting that the Department take the added administrative step of withdrawing the frequencies previously allocated to Spirit and Frontier. There is no need for such unnecessary action because the Department has already determined that “any frequency not utilized for a period of 90 days (once inaugurated) would be deemed dormant and the allocation with respect to each such frequency would expire automatically and the frequency would revert to the Department for reallocation.”   

The 21 frequencies sought by JetBlue and other carriers will have reverted to the Department by the time that each applicant proposes to start new United States-Havana service later this year utilizing those frequencies. Because Delta’s request adds an unnecessary and procedurally complex step, JetBlue urges the Department to dismiss Delta’s motion as moot.

WHEREFORE, JetBlue respectfully objects to the applications of Delta, American and Southwest, urges the Department to dismiss Delta’s motion as moot, requests that the Department institute a frequency allocation proceeding, and grant any such further relief as the Department deems warranted.”

Complete Text Of Submission

United Airlines/Mesa Airlines Seek Additional Houston-Havana Routes

Excerpts From United Airlines/Mesa Airlines Filing With United States Department of Transportation

“In light of recent reports that Frontier and Spirit plan to suspend indefinitely their Havana services and in response to the recent applications submitted by JetBlue, Delta, American and Southwest for additional frequencies to provide service to Havana from Fort Lauderdale, Boston and Miami, United and Mesa d/b/a United Express (the “Joint Applicants”) affirmatively apply for six weekly U.S.-Havana frequencies to enable United to expand its Saturday-only Houston- Havana service to daily service and for Mesa to obtain underlying exemption authority to operate this service as a United Express carrier. To that end, Mesa applies pursuant to 49 U.S.C. § 40109 and Subpart C of the Department’s Rules of Practice for an exemption from 49 U.S.C. § 41101 authorizing Mesa to provide scheduled foreign air transportation of persons, property and mail between Houston and Havana. The Joint Applicants ask that the requested exemption authority for Mesa become effective as soon as possible and that the authority be effective for a period of at least two years, subject to the Department’s standard conditions.

United and Mesa answer the applications of JetBlue, Delta, American and Southwest and state as follows in support of their joint application:

Reallocating six weekly Havana frequencies to United will allow United and its customers to continue to benefit from the successful early results of its Saturday Houston-Havana service. United now plans to offer consumers convenient daily nonstop flights between United’s world class hub at Houston George Bush Intercontinental Airport and Havana’s José Martí International Airport to the benefit of passengers traveling in the local Houston-Havana market as well as passengers traveling between points served behind United’s Houston hub network and Havana. The Miami Herald has reported and Official Airline Guide (“OAG”) published schedules indicate that Frontier intends to suspend its Miami-Havana service on June 4, 2017. Likewise, media reports published on April 17, 2017 indicate that Spirit will cease Havana service by the end of May 2017. The Department should not allow these valuable frequencies – which the United States Government worked so diligently to secure – to become dormant. As the Department is aware, frequencies are subject to the condition that they will become dormant and revert automatically to the Department if they are not used for a period of 90 days. See Order 2016-8-38 at 14.

United can make expeditious and more efficient use of these valuable frequencies to establish daily service on the successful Houston-Havana route and assures the Department that it stands ready to use these six frequencies on a year-round basis.  United proposes to begin daily service between Houston and Havana on October 28, 2017 commensurate with the launch of the IATA winter 2017-18 season. United will use either Boeing B737 aircraft from its existing fleet or Embraer E175 aircraft from Mesa’s existing fleet, as conditions warrant.

In order to fully implement the proposed arrangement and maximize United’s flexibility to provide Houston-Havana services, Mesa requires and hereby applies for underlying exemption authority to provide scheduled service on the Houston-Havana route. Mesa is a Nevada corporation with its principal office at 410 North 44th Street, Suite 700, Phoenix, AZ, 85008, and a citizen of the United States within the meaning of 49 U.S.C. § 40102(a)(15). Mesa holds various certificates of public convenience and necessity and exemptions authorizing it to engage in scheduled air transportation of persons, property and mail, and Mesa is clearly fit, willing and able to provide the proposed services. See, e.g., Order 2008-4-26 (Open-Skies Certificate) and Notice of Action Taken dated August 16, 2016 in Docket DOT-OST-2016-0147 (U.S.-Mexico exemption). Its proposed service between Houston and Havana is not materially different in terms of aircraft size or stage length from its previously authorized interstate and foreign air services. Mesa requests that the Department take official notice, pursuant to Rule 24 of the Department’s Rules of Practice, of all other data on file with the Department necessary to establish its fitness.

The authority sought herein is fully consistent with the Memorandum of Understanding of February 16, 2016 between the United States and the Republic of Cuba (“MOU”). The MOU permits carriers of the two countries to operate scheduled services between any point or points in the United States and any point or points in Cuba, subject to a frequency limitation of 20 daily frequencies to Havana.  See MOU, Section 1 and Annex I.  Indeed, the Department has issued similar exemption authority and frequencies to other U.S. carriers and there now appear to be, or soon will be, U.S.-Havana frequencies available. In addition, the MOU permits cooperative marketing arrangements such as the “United Express” services proposed here. See MOU, Section 7. The proposed services are not projected to utilize more than 10 million gallons of fuel annually and, in any event, Mesa does not envision having any difficulties in acquiring fuel for these services.

As United indicated in its March 2, 2016 application and subsequent filings in this docket, its Houston-Havana flights serve the nation’s fourth largest metropolitan area out of United’s hub gateway to Latin America while also reaching the eighth largest Cuban American population in the U.S. See Exhibit UA-R102. It is worth noting that Houston is one of only two cities west of the Mississippi River that were awarded U.S.-Havana routes. See Order 2016-7-4 (“Show Cause Order”) at 6. United’s Havana service from Houston continues to develop and shows strong enough demand to support an expansion from Saturday only to daily service using appropriately sized capacity that Mesa’s Embraer E175 aircraft offer. Today, United’s Saturday flight connects 20 U.S. points on a roundtrip basis with Havana and reaches almost 200,000 Cuban Americans throughout the country. Exhibits UA-R106 and UA-R107. With the planned change to daily service, United would connect 27 points in the western and central United States.

Recognizing the merits of United’s service proposal, the Department determined that United’s Houston-Havana flights would be “consistent with the Department’s stated goals and the public interest” insofar as Houston George Bush Intercontinental Airport “is a major hub with connections to cities across the central and western United States” with “significant local traffic potential.” Show Cause Order at 8-9. With the lion’s share of these scarce and valuable frequencies already earmarked for Florida and recent cessations of service from Florida indicating there may be more capacity than demand in that market, the Department should capitalize on this opportunity to promote carrier competition, gateway diversity and consumer choice and convenience by reallocating six frequencies to United. In addition, this Joint Answer and Application is well supported by the Houston Airport System.  See Attachment 1.

Should the Department decide that a route proceeding is necessary or appropriate to reallocate the Frontier and Spirit frequencies, United reserves the right to actively participate in any such proceeding, to demonstrate the comparative and compelling benefits of United’s service proposal and to contest the merits and claimed benefits of any other carrier application.

WHEREFORE, United urges the Department to reallocate six frequencies to United to be used for daily service between Houston and Havana, grant Mesa’s application for underlying exemption authority to provide scheduled service on this route and grant such other relief as the Department may deem appropriate.”

Complete Text Of Filing In PDF Format

 

FedEx Seeking Authorization For Monday-Friday MIA-HAV All-Cargo Service

Excerpts From FedEx Filing With United States Department of Transportation

“Federal Express Corporation (“FedEx”) hereby submits this consolidated Answer to the recent filings of JetBlue, Delta, American, Southwest, and United in the above-captioned Department of Transportation (“the Department”) docket wherein those carriers seek award of additional U.S.-Havana, Cuba (“HAV”) daily frequencies ostensibly becoming available for re- allocation by the Department after Spirit and Frontier cease their U.S.-HAV air services. Given that this potentially available HAV frequency supply already outnumbers the carrier requests – i.e., four carriers have collectively applied for allocation of the three daily HAV frequencies currently held by Spirit and Frontier – FedEx supports JetBlue’s motion to institute a frequency allocation proceeding for the Department's adjudication of this matter.

In fact, and as further described herein, FedEx hereby submits its application for allocation of a single daily scheduled frequency to operate all-cargo service between Miami, Florida (MIA) and HAV and for the necessary exemption authority for this MIA-HAV air service. FedEx, however, would respectfully note that a U.S.-HAV frequency allocation proceeding regarding the HAV frequencies currently held by Spirit and Frontier would be premature if it occurred before Spirit and Frontier either formally surrendered their HAV frequencies or the 90-day dormancy period for those frequencies had elapsed. Until one of these events occurs, there are actually no available HAV frequencies to re-allocate.

Moreover, with respect to the 90-day dormancy condition attached to these frequencies, it is not a foregone conclusion that the required timeframe will have run for the HAV frequencies at-issue by the time of the Fall 2017 service start dates proposed in the other carriers’ HAV frequency applications. Accordingly, FedEx would respectfully request that any frequency allocation proceeding instituted in this matter not occur until the HAV frequencies currently held by Spirit and Frontier in fact are available for re-allocation. And, at that appropriate time, FedEx looks forward to demonstrating how, as the only U.S. all-cargo carrier participant in the overall U.S.-Cuba Frequency Allocation Proceeding, granting FedEx’s HAV frequency request would maximize the public benefit for U.S. shippers and U.S. commerce overall.

Notwithstanding the foregoing, and to the extent required at this juncture, FedEx submits its application both for allocation of a single daily scheduled frequency to operate all-cargo service between MIA and HAV and for exemption authority under 49 U.S.C. §40109, as more fully set forth below.  Insupport of itsapplication and inaccordancewith 14 C.F.R. §302.303, the Department's Order Instituting Proceeding and Inviting Applications, and the MOU, FedEx....

In conclusion, FedEx respectfully requests that the Department accept FedEx’s application for allocation of a single daily scheduled frequency to operate all-cargo service (Monday-Friday) between MIA and HAV and for exemption authority relating thereto, that the Department institute a frequency allocation proceeding for this matter at the appropriate time when there are HAV frequencies actually available for re-allocation and include FedEx’s application in said proceeding, and that the Department grant any such further relief deemed warranted.”

Complete Text In PDF Format

Senator Rubio Of Florida Speaks Again About Cuba; Is Most Influential Member Of Congress For Companies

One member of the United States Senate is today the most influential member of the United States Congress with respect to Republic of Cuba-related issues: The Honorable Marco Rubio (R) of Florida.

He is the Chairman of the Subcommittee on Western Hemisphere, Transnational Crime, Civilian Security, Democracy, Human Rights, and Global Women’s Issues of the Foreign Relations Committee of the United States Senate.  He is also a member of the Committee on Appropriations, Select Committee on Intelligence, and Committee on Small Business and Entrepreneurship.

As he prepares for an expected second opportunity to seek the nomination of the Republican Party to be its candidate for the presidency, and continues to seek to be an influential national voice within the Republican Party, he needs to view any impact to changes in United States policies and regulations relating to the Republic of Cuba upon the State of Florida in macro-terms rather than the micro-terms of a member of the House of Representatives who focuses upon one district within a state. 

As a result, there is pragmatic distance between his public desire for substantial changes to United States policies and regulations relating to the Republic of Cuba and measured acceptance of changes to United States policies and regulations; with the measured acceptance being partially influenced by the interests of United States-based companies, specifically those operating (and employing) within the State of Florida, State of New York and State of Texas among others from which financial contributions will be sought.  Link: List of United States Companies with A Presence in The Republic of Cuba

The Honorable Marco Rubio (R- Florida)
Washington Conference on the Americas
United States Department of State
Washington, DC

9 May 2017

Excerpts from Remarks:

“I hope that we will, in a strategic way, recalculate the concessions that have been made with the dictatorship in Cuba."

“I fear that too much time has been used to placate hostile governments.”

Video of Remarks

https://www.c-span.org/video/?428237-1/senator-marco-rubio-calls-renewed-focus-western-hemisphere

Blog Post Mentioning Senator Marco Rubio & Comments About The Republic Of Cuba

23 April 2017

http://www.cubatrade.org/blog/2017/4/23/senator-rubio-on-meet-the-press-shares-about-conversation-with-nsc-staff-was-cuba-on-the-agenda?rq=Marco%20Rubio

5 April 2017

http://www.cubatrade.org/blog/2017/4/5/from-politico-usda-secretary-nominee-confirmation-delayed-due-to-cuba?rq=Marco%20Rubio

1 April 2017

http://www.cubatrade.org/blog/2017/4/1/senator-marco-rubio-r-of-florida-discusses-his-three-discussions-about-cuba-with-president-trump?rq=Marco%20Rubio

16 February 2017

http://www.cubatrade.org/blog/2017/2/27/president-trump-mentions-cuba-at-press-conference?rq=Marco%20Rubio

Could Targeting China's Huawei Be Trump Administration's 1st Cuba Policy Action?

Sanctioning Huawei Of China May Be First Strike By Trump Administration Towards Cuba

Shenzhen, People’s Republic of China-based Huawei Technologies Co. Ltd. (2016 revenues exceeded US$75 billion) is a global networking and telecommunications equipment and services company comprised of three operating groups: Carrier, Enterprise, and Consumer.  

The company, which has its United States headquarters in Plano, Texas, is the world’s second-to-third-largest manufacturer of cellular telephone equipment and has substantial revenue streams from exports of products and services to the United States.

In 2017, the company received a subpoena from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, DC.

In 2016, the company received a subpoena from the Bureau of Industry and Security (BIS) of the United States Department of Commerce in Washington, DC.

The subpoenas focused on technology transfer activities (and potential military/civilian dual-use issues) by the company in the Republic of Cuba and Iran, Sudan, and Syria during the last five (5) years.

The investigation of Huawei Technologies Co. Ltd. commenced during the Obama Administration and has continued during the Trump Administration.  

There have been no reported efforts by the Trump Administration to interrupt the investigation begun by career staff at the BIS and the OFAC.  

The Trump Administration may use the potential impact of financial (which could exceed US$2 billion) and United States market-access (most significant) penalties against Huawei Technologies Co. Ltd. as a means to obtain assistance from the government of the People’s Republic of China on issues relating to North Korea and, perhaps, relating to the Republic of Cuba.  

The government of the People's Republic of China may seek relief from any penalties upon Huawei Technologies Co. Ltd. relating to the Republic of Cuba as a condition for supporting Trump Administration efforts relating to North Korea.

Members of the United States Congress and individuals within the Trump Administration (The White House, United States Department of the Treasury, United States Department of State, United States Department of Justice and United States Department of Defense) have an interest in requiring the government of the People’s Republic of China to lessen its support for the Republic of Cuba in return for any relief to Huawei Technologies Co. Ltd.

Any adverse decision impacting the relationship between Huawei Technologies Co. Ltd. and its access to the Republic of Cuba marketplace will unlikely result in commensurate opportunities for United States-based companies.  Other People’s Republic of China-based companies and those located in Japan and in South Korea would be the expected beneficiaries.  

If there are restrictions imposed upon Huawei Technologies Co. Ltd., the government of the Republic of Cuba would not be expected to disrupt roaming or service agreements with New York, New York-based Verizon; Dallas, Texas-based AT&T; Overland Park, Kansas-based Sprint; Bellevue, Washington-based T-Mobile, and Newark, New Jersey-based IDT Corporation; or the server installation and operation agreement (donation) with Menlo Park, California-based Google.

See 19 February 2016 Blog Post:

http://www.cubatrade.org/blog/2016/2/19/huawei-of-china-gaining-in-cuba-while-us-companies-do-not?rq=FCC

From 20 January 2016 to 22 January 2016, The Honorable Daniel Sepulveda, Deputy Assistant Secretary of State and U.S. Coordinator for International Communications and Information Policy led an official fourteen-member delegation to the Republic of Cuba which included The Honorable Thomas Wheeler, Chairman of the Federal Communications Commission (FCC) and FCC staff, representatives from the OFAC, and according to Deputy Assistant Secretary Sepulveda, representatives of “academia, and the private sector.”  

The names of the non-United States government participants have not been disclosed by the United States Department of State.  The Washington, DC-based Information Technology Industry Council confirmed that its president, Mr. Dean Garfield, participated in the delegation “led by the U.S. Ambassador and Deputy Assistant Secretary of State for International Communications and Information Policy Daniel Sepulveda.”  Other private sector participants included representatives of California-based Cisco Systems, Pennsylvania-based Comcast, Sweden-based Ericsson (North American Headquarters in Plano, Texas).

From one private sector participant on 28 January 2016: “The trip was an official U.S. delegation visit by the State Department, and [redacted] was invited to join as part of the delegation.  I can find a point of contact to pass along at the State Department who can answer your questions since they organized the trip.”  

From Chairman Wheeler on 27 January 2016: “Ambassador Daniel Sepulveda from the State Department led our delegation which also included representatives from the Department of the Treasury as well as representatives of the technology community. The inclusion of the private sector in the talks advanced the dialog with real life examples of what was possible.”  

On 1 February 2016, Republic of Cuba government-operated Empresa Nacional de Telecomunicaciones de Cuba S.A. (ETEC S.A.) reported that it would install broadband services within the area of Old Havana using equipment sourced from Shenzhen, People’s Republic of China-based Huawei Technologies Co Ltd. (2015 revenues exceeded US$28 billion).  On 6 November 2015, Huawei Technologies Co Ltd. Reported an agreement to market mobile devices, parts, accessories and to train repair personnel.  The government of the People’s Republic of China has extended substantial financial credits to the government of the Republic of Cuba. 

A challenge for United States-based communications/telecommunications companies and the United States government is how to answer the following inquiry from the Ministry of Communications of the Republic of Cuba: “If we purchase your equipment, how do we know the equipment will not be compromised before it arrives or have an ability to be compromised from abroad after its installation?  Will you augment the specifications of equipment so we may monitor all voice, text, data and email traffic flowing through the equipment?”   

Sun Country Airlines Receives USDOT Authorization To Delay Cuba Flights Until December 2017

Eagan, Minnesota-based Sun Country Airlines, Inc., received authorization in 2016 from the United States Department of Transportation (USDOT) to service two routes: Minneapolis-St. Paul International Airport (MSP) to Santa Clara (SNU), Republic of Cuba, and MSP to Matanzas (VRO), Republic of Cuba.

Sun Country Airlines, Inc., has requested that the USDOT authorize the company to delay implementation of the two routes until December 2017; the service was scheduled to commence in March 2017.  The USDOT has granted the request to delay the service.

The Minneapolis Star-Tribune reported that Sun Country Airlines issued the following statement: “We remain optimistic and continue to work through logistics for dedicated Cuba service, but our priority is ensuring an easy and enjoyable travel experience for our customers upon arrival.”

The company has not posted updated information to its Internet site, www.suncountry.com

LINK TO USDOT APPLICATION

LINK TO USDOT RESPONSE

Cuba's 1st Potentially Five-Star, AAA Diamond Property, Kempinski Manzana La Habana, Welcomes Guests On 31 May 2017

The Gran Hotel Kempinski Manzana La Habana may be the first property in the Republic of Cuba to earn a four or five rating from AAA and/or Forbes Travel Guide.  It's first guests will check-in on 31 May 2017.  The property expects to be fully-operational.

Room rates on the hotel's Internet site for a one-night stay from 9 June 2017 to 10 June 2017 range from US$440.00 (patio room) to US$720.00 (suite familiar) per night.

http://www.cubatrade.org/blog/2017/1/29/cubas-1st-us-standard-based-five-star-hotel-is-about-to-open?rq=Kempinski

Gran Hotel Kempinski Manzana La Habana
Calle San Rafael (entre Monserrate y Zulueta)
La Habana Vieja , 10100, Havana Cuba
Reservations.lahabana@kempinski.com

https://www.kempinski.com/en/havana/gran-hotel-kempinski-la-habana/

Geneva, Switzerland-based Kempinski Hotels SA has a management contract with Republic of Cuba government-operated Gaviota SA., controlled by Republic of Cuba government-operated Grupo de Administracion Empresarial S.A. (Enterprise Management Group), or GAESA, which is, in turn, controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR).  

Kempinski Hotels SA operates seventy-five (75) five-star properties in thirty (30) countries.  The Bangkok, Thailand-based Thailand Crown Property Bureau has a majority shareholding in Kempinski AG, which owns Kempinski Hotels SA.

From the Kempinski Hotels Internet site: "Originally built between 1894 and 1917 as the first European style shopping arcade in Cuba, Gran Hotel Kempinski Manzana La Habana is situated in the heart of the old Havana with a direct view of the Capitol and the Great Theatre of Havana and amidst UNESCO World Heritage sites. The famous Castillo del Morro is accessible within a 10 minute drive. Experience the first true luxury hotel in Cuba and indulge yourself while staying in one of our 246 large rooms or suites with extra high ceilings and French windows opening out to the old city. Experience a variety of restaurants and bars, which also includes a one of a kind cigar lounge and a roof top Panoramic Restaurant and Bar with spectacular views over the old city. Relax in our spa, fitness center and rooftop pool."

The value of the renovation project has been estimated as US$30 million to US$50 million.

There are no properties in the Republic of Cuba that currently achieve a AAA Four Diamond Award or AAA Five Diamond Award from the Heathrow, Florida-based AAA (formerly American Automobile Association) or a Four-Star Rating or Five-Star Rating from the Atlanta, Georgia-based Forbes Travel Guide.   Neither AAA nor Forbes Travel Guide have rated any properties in the Republic of Cuba.  From AAA: "AAA’s Diamond Rating System does not cover Cuba at this time."

From Forbes Travel Guide: "At this time we do not have any star rated hotels in Cuba though we continue to watch the destination with interest and look forward to launching the country as a new market in the not too distant future. We are really waiting for the hotel infrastructure to generate levels of service that would qualify them to be considered for an evaluation and potential Star Award.  We have not sent any inspectors into Cuba at this time for this reason though have already made high level visits by members of our Executive office."  The Chief Executive Officer of Forbes Travel Guide, Gerald J. Inzerillo, visited the Republic of Cuba in 2016.

Properties rated five-stars in the Republic of Cuba generally equate with one-star to three-star properties in the United States.