Cuba Travel Restrictions Affect 800,000 Bookings


By The Maritime Executive 06-05-2019 09:32:44

The Trump administration enacted new restrictions on travel to Cuba by U.S. citizens on Tuesday.

The restrictions include a ban on cruises and aim to put pressure on Cuba for supporting Venezuelan President Nicolas Maduro. The State Department said it would no longer allow group people-to-people educational travel or visits from passenger and recreational vessels. 

U.S. Treasury Secretary Steven Mnuchin said: “Cuba continues to play a destabilizing role in the Western Hemisphere, providing a communist foothold in the region and propping up U.S. adversaries in places like Venezuela and Nicaragua by fomenting instability, undermining the rule of law and suppressing democratic processes.”

Former U.S. President Barack Obama had relaxed restrictions to allow commercial flights and cruise services. The U.S. became the second-largest source of travelers to Cuba after Canada, reports Reuters. Over 257,000 U.S. citizens, not including those of Cuban origin, visited Cuba from January through March, with 55 percent arriving on cruise ships.

Cruise Lines International Association (CLIA) issued a statement in response to the restrictions, saying: “Without warning, CLIA Cruise Line Members are forced to eliminate all Cuba destinations from itineraries effective immediately. This affects nearly 800,000 passenger bookings that are currently scheduled or already underway. Passenger bookings had been made under a general license previously issued by the United States Government that authorized 'people to people' travel to Cuba. These travel restrictions effectively make it illegal to cruise to Cuba from the United States. While this situation is completely beyond our control, we are genuinely sorry for all cruise line guests who were looking forward to their previously booked itineraries to Cuba.”

Royal Caribbean Cruises estimates that the financial impact of the regulatory change is a reduction to the Adjusted EPS for 2019 in the range of $0.25 to $0.35 per share.

"While the affected sailings impact only three percent of our 2019 capacity, the extremely short notice period for this high yielding destination amplifies the earnings impact," said Jason T. Liberty, executive vice president and CFO. "The result of this policy change has created a short-term impact to our guests, operations and earnings. Fortunately, we have many alternative and attractive destinations for our guests to choose from."