To enter Cuba, tour operators navigate a minefield of rulesPosted on: July 26, 2011By Gay Nagle Myers
Think of Cuba today as a theater in which the curtain is about to go up on the first act of a performance that created quite a buzz in rehearsals a decade ago.
Abercrombie & Kent announced new Cuba programs last week, followed a day later by a similar announcement from the Globus Family of Brands.Insight Cuba was first out of the gate in June, and according to director Tom Popper, it didn't take long to fill its inaugural trip, which departs Miami on Aug. 11.
There are other companies already in the mix as well, and more announcements from mainstream operators are expected soon.
Fueling all these product announcements is a policy change issued by the Obama administration in January, which allows U.S. citizens to travel to Cuba to meet with local Cubans in the "people-to-people" category of educational and cultural travel.
The administration expanded the definition of group travel to Cuba beyond strictly religious, educational, humanitarian and cultural travel to include U.S. travelers who want to meet and share experiences with local Cubans in all walks of life.
The people-to-people programs were popular during the final years of the Clinton administration, but they were discontinued in 2004 by President George W. Bush.
Obama reversed Bush's decision this year, serving to heighten interest in travel to Cuba by all sorts of groups and triggering numerous applications for people-to-people travel licenses from the U.S. government.
But while a lot of companies are clearly eager to jump into the fray, the process of developing a Cuba product requires patience and a deep understanding of how to navigate the legal minefield of federal regulations to obtain a license.
The Treasury Department's Office of Foreign Assets Control is charged with overseeing, implementing, licensing and regulating all categories of travel to Cuba by U.S. citizens.
Travelers, too, are bound by strict rules and regulations. They still must travel in escorted groups on trips led by authorized, U.S. government-licensed organizations.
Tour operators like Insight Cuba, A&K and Globus have partnered with or are associated with nonprofit organizations, some of which already held a license to offer other categories of travel to Cuba, such as educational, religious or cultural tours.
Tour operators cannot obtain such a license themselves, under the current OFAC regulations.
Once companies or organizations have obtained a license to operate people-to-people programs, they must turn to travel service providers to handle the travel arrangements for participants in their programs, including booking hotel accommodations, air, tours and activities in Cuba.
The TSPs — and there are a lot of them — are licensed and appointed by OFAC to uphold the regulations of the Treasury Department. TSPs facilitate travel, collect money and provide services for those individuals or groups who themselves are licensed to go to Cuba.
Many of the TSPs are located in South Florida, and the bulk of their business involves handling air travel bookings for Cuban-Americans traveling to Cuba on a general license to visit relatives, a change that Obama announced in 2009.
In other words, any travel to Cuba must involve two layers of government-certified entities: a licensed tour operator or nonprofit travel organization and a licensed TSP.
The official list of TSPs appears as a link on the Treasury Department's website, at www.treasury.gov/resource-center/sanctions/Programs/pages/cuba.aspx.
For example, Globus and its partner — the Center for Caribbean Religion & Culture, which holds the license for the Globus programs to Cuba — are working with Miami-based Cuba Travel Services, an authorized TSP, to facilitate all the travel arrangements for the Globus programs.
Globus will launch its series of escorted products in January, starting with a series of religious travel programs. It plans to expand later into the people-to-people category of cultural exchange travel.
Departure dates for the religious trips will be announced on Aug. 10, at which time the program will also begin taking reservations. Program details and pricing will be posted on the Globus website on that date, said Mike Shields, managing director for groups and emerging markets.
"There will be series of departures from January through May 2012, which will resume again in September through the end of the year," Shields said.
The Globus product
Globus' first itinerary will be "A Spiritual, Historical and Cultural Journey," an eight-day Havana-only escorted package.
Scott Nisbet, CEO for the Globus family of brands, described the program as a "once-in-a-lifetime experience for Globus travelers."
"This itinerary presents an interesting, insightful opportunity to connect with a fascinating country we know very little about," he said. "We are thrilled to be among an elite group of tour companies selected to transport travelers on this spiritual journey to a bygone era."
The itinerary will incorporate a number of religious sites and religious-themed activities in Havana as well as offer participants a walking tour of Old Havana, a tour of the Colon Cemetery, a visit to the Museum of the Revolution and a ride in a 1950s car.
The trip is priced from $2,889 per person, land only, and includes accommodations at the Melia Cohiba in Havana, all meals, air-conditioned motorcoach transport and the services of an in-country host/guide.
Roundtrip charter air from Miami to Havana is extra. Air as well as all other travel arrangements will be handled by Cuba Travel Services, an OFAC-licensed TSP.
The A&K product
A&K has operated in Cuba for five years out of its U.K. headquarters, offering custom and group tours for travelers from countries other than the U.S. It will launch its Cuba program for American travelers this fall out of its U.S. office.
Its series of Cuba programs for U.S. travelers, is made possible by a partnership with the California-based Foundation for Caribbean Studies, a nonprofit organization licensed by OFAC. The product will consist of escorted motorcoach programs led by local in-country host/guides.
The 11-day inaugural trip departs Sept. 30, followed by departures Oct. 14 and 17; Nov. 23; and Dec. 12 and 22.
Departures in 2012 "could at least double this year's number, based on early forecasts," said Scott Wiseman, A&K's president in the U.S. "We've built upon our experience in Cuba to ensure our guests will discover Cuba at its most intimate, authentic and in complete comfort.
"Each tour is limited to 24 participants and includes contact with Cuban people in all walks of life, from artists and architects to musicians and farms."
Tour participants fly into Cienfuegos, near Trinidad on Cuba's south coast, spend three nights at the Iberostar Gran Hotel Trinidad and explore the area before moving on to the Hotel Nacional in Havana for seven nights.
The tours are priced from $4,325 per person, including accommodations, meals, air-conditioned motorcoach transport and an expedited visa process upon arrival.
Itineraries include visits to Havana, the colonial town of Trinidad, the cultural city of Matanzas, the Cuban countryside, historical sites, sugar mills, a cigar factory and a rum plantation as well as special sites open only to A&K participants.
Among the special sites is a private visit to Room 511 in the Hotel Ambos Mundos, Ernest Hemingway's hideout in Havana, and a tour of Finca Vigie, the writer's seaside home. Richard Harris, senior vice president of operations, said that because the tour is offered before the home opens to general visitors each day, "it is more personalized and intimate and less congested."
The tour price does not include a $449 charter flight from Miami, a $200 fee to the Foundation for Caribbean Studies nor $55 in visa costs.CubaTobacThe Insight Cuba product
Insight Cuba, a division of Cross-Cultural Solutions, a nonprofit organization specializing in people-to-people cultural exchanges around the world, legally carried 2,500 U.S. citizens to Cuba in the second half of 2003 alone, according to director Tom Popper.
When Insight received its license in late June from OFAC, "we were excited to be able to relaunch the people-to-people programs once again," Popper said.
The firm is offering six distinct products, with more than 130 departures through September 2012. Its inaugural tour, on Aug. 11, is already sold out.
"Bookings are going swimmingly," Popper said. "We have more than 200 bookings scattered throughout our other departures, and the numbers grow every day."
Popper ramped up his staff of travel specialists to handle the additional volume after the Cuba programs were launched. Today, he said, "We're handling between 500 and 700 emails and phone inquiries a week."
Each of Insight's programs will be limited to 16 participants.
Prices range from $1,695 for the three-night Weekend in Havana tour to $3,339 for the seven-night Cuban Music & Art Experience tour.
Prices cover all meals, double-occupancy accommodations, motorcoach transport, domestic flights within Cuba if required, entry fees, guide services and travel insurance. Most programs run seven nights.
Air is not included in the package price. Insight Cuba works with Marazul Charters, a TSP licensed for Cuba travel since 1977.
Esta vez la carta que comienza ha remover el estiercolero del sistema comunista es el turismo. “Jardines del Rey”, Polo Turistico al norte de Morón, Ciego de Avila.Hotel Melia Cayo Guillermo, perteneciente a la firma espanola Meliá,corporación insignia ha cerrado y sus trabajadores han quedado“disponibles”, término que utilizan para no decir desempleados en la Cuba Socialista “espejo de Latinoamerica”. Turistas de Inglaterra, Alemania, Canada, y otros países han abandonado sus paquetes turísticos al retirarse de la instalación mencionada por escasez de alimentos y licores al estilo de un cinco estrellas, teniendo que soportar durante algunos periodos de tiempo un día agobiante de calor en sus habitaciones, pues la administración les impidia hacer uso de los aires acondicionados, como sucede en otros hoteles. Otro hotel que esta a punto de cerrar es el administrado por la firmaGAVIOTA, perteneciente a las FAR, conocido como el Senador o NH KRISTAL porque fueron firmas que estuvieron, pero se fueron. Según los propios trabajadores que suministraron estos datos a la APLA en calidad de anonimato, en el día de ayer 31 de mayo habían sólo 6 turistas en el complejo más grande del Polo Turístico “Jardines del Rey”, que se ubica entre los hoteles Tryp Cayo Coco y Sol Meliá Cayo Coco, cuando su capacidad es para más de mil turistas. Otra información recibida de afectados con el desempleo, y comprobada por estos comunicadores sociales, dice que están optando por incentivar el turismo de bajo precio, entre paises de Latinoamerica como Argentina, además de tratar de los propios cubanos se alquilen en los hoteles o “disfruten” del llamado DAY USE, o sea un dia en las playas de los Cayos Coco o Guillermo.
A new dawn for Cuba as capitalism eclipses communismBy David Usborne in HavanaSaturday, 5 March 2011
The party begins to pop at about midnight when the half-naked male models point the last stragglers to the open roof top.
On a second level above us under the stars the DJ turns it down briefly to allow a solo trumpeter to play a sensuous salsa serenade while behind the bar – as long as a swimming pool and sagging with mojito cocktails – lesbian porn from the nineteen thirties is projected on an bare wall.
The guests, in from Sao Paolo, Mexico City, Paris and Madrid, take it in their sophisticated stride, navigating past mattresses for the boozed up and the louche and feigning insouciance as Oscar-winning actor Benicio Del Toro brushes past. There had been a clue in the invitation about what was to come. Dress code: "tropical glam".
Yet there is wonder if not actual shock in their smiles even as they dance their last dance and surrender to the approaching Caribbean dawn. We are not in Miami, Palm Beach or even Los Angeles. This is Havana, home to one of the last Soviet-style regimes in the world. Now in the lift going back down an impossible rumour goes around. Two of Raul Castro's sons attended the party. You never saw them?
Cuba is changing. The roof-garden fete, with its decadent pulse, was not something you see in Havana on your average Saturday night. Some may have thought of it as an aberrant flashback to the pre-revolution days when frolicsome behaviour was the norm. But to others it seemed like a back-to-the-future experience. Was this a glimpse of this grand but crumbling city 10 or 20 years from now, raring once again for fun? A reporter meanwhile tries to straighten out those Castro sightings. The surprise: no sons but two grand-daughters had indeed shown up.
Grandfather Raul, who turns 80 this year four years after taking over as President from his ailing brother and founder of the revolution, Fidel, will not have given the party a second's thought. That Cuba is tiptoeing back into the sunlight is of his own personal doing, after all. It was last September that a stunned nation as told that the centrally planned economy was dying and needed radical surgery. By the end of this April, the government decreed, 500,000 Cubans would have been fired from state jobs. In the longer term, the Raul-sanctioned plan would eliminate about 1 million jobs, or roughly 20 per cent of the workforce.
It is an audacious blueprint that will kill the socialist model erected by Fidel and his co-revolutionary Che Guevara 53 years ago or save it from collapse. Its success or failure will depend largely on whether Cuba, with its epic inefficiencies and laid-back rhythms, can rediscover long-suppressed capitalist instincts. Today, the state employs almost 90 per cent of all workers. As many of those are now laid off they will be encouraged to apply for licenses to try their hand at private enterprise. Fidel did something similar 15 years ago, but on a far tinier scale – Havana saw the opening of a handful of family-run restaurants and hostelries for tourists – and he later backed away. This promises to be much bigger.
What it means is that Cuba is in a state of high agitation. Interviews over several days with Cubans of all backgrounds suggested a people uncertain whether to be deeply afraid of what is coming or grateful that after decades of stagnation, their leaders finally are ready for reform. And there have been other signs of movement from the top. In February, the regime with little fanfare lifted the internet firewall that for years had blocked much of what Cubans could see on the web (though only a fraction of the population has access to it). And the months since last July have seen 60 political prisoners released, all originally rounded up in the so-called 'Black Spring' of 2003. Only seven of those arrested in that crackdown now remain behind bars.
Miguel Barnet, the President of the Writers' and Artist's Union, an amiable man about Havana who has a direct line of communication with the Castros (and is therefore not free to speak entirely candidly), accepted that Cuba is in a tricky place but was certain that Raul knows what he's doing. "I am very optimistic for Cuba," he tells me. "What would be tricky is if there was no transition going on. We need to do this."
Raul has support from other members of the top communist leadership. Next month, a Communist Party Congress will be convened, something not seen in a decade and a half. It will approve the full Raul reforms that not only will significantly broaden the areas in which free enterprise will be tolerated and even encouraged but – perhaps most surprising and risky – will simultaneously introduce a system of income tax.
We also know, however, that resistance has been powerful at the next level of communist leaders – the ones who have to choose who is to lose their jobs and then tell them. Sources spoke of uproar one recent night at the luxury, state-operated Melia Cobiba Hotel when top socialist officials gathered the staff of 580 people and told them only 480 would be returning the following day.
In an attempt at consultation and fairness, committees were established to discuss how the lay-offs might work. Their work was concluded last weekend and on Monday Raul acknowledged that progress on sacking the first 500,000 workers had been slow. The end-April deadline, he said, would therefore be extended. He gave no new clear schedule for reaching his final goals.
Speculation abounds that he may also be slowing the pace because of Tunisia, Egypt, Libya and other countries in the Middle East where citizens have risen up against authoritarian regimes. However, Cuba is different. It does not have a youth-heavy population, access to sites like Twitter and Facebook is extremely limited and there is no issue of corruption or great displays of wealth among the ruling elite. "We write to our capitals every day and say it is not going to happen in Cuba," says one junior diplomat at the Canadian embassy here. "Change is going to come not at once, but bit by bit."
Then there is this: while the prisoner release programme has cheered human rights groups and even some dissident leaders in the country, no one supposes that old habits of repression have died. Thus two weeks ago, on the first anniversary of the death from hunger strike while behind bars of dissident Orlando Zapata Tamayo, the regime moved temporarily to round up 45 dissidents and confine 60 more in their homes to diminish the chances of street protests. All were released when the anniversary was over.
"Some positive steps have been taken," a diplomatic source in Havana said, noting the release of the 60 political prisoners. "But we remain extremely worried about the human rights situation." He described a security apparatus that remained alert and ubiquitous. Any kinds of street gatherings are instantly quashed, in part by thugs hired by the state. The front page of the Communist Party paper, Granma, last week reported that the spokesperson for the Ladies in White, a protest group of wives and relatives of those first incarcerated in 2003, had been unveiled as a government informer. What motivated the paper to run this is unclear.
The United States, which maintains its 49-year-old economic embargo although restrictions on sending money and travelling to Cuba have been eased by President Barack Obama, has its own human rights crisis with Cuba, involving US citizen Alan Gross, 61, who was to go on trial in Havana yesterday. Caught distributing satellite reception equipment to Jewish groups in Cuba to improve their access to the internet, he was arrested on charges of espionage and could face 20 years in jail if convicted. The US has protested and demanded his release.
The embargo is a big part of what ails Cuba, which was kept afloat for years by Moscow until the Soviet Union collapsed in 1989. The other problem is the lack of liquidity in Cuba, where no system of credit exists. Meet Jose, for example, who for years worked as a carpenter before – in the Cuban equivalent of winning the lottery – landed a job last year driving a tourist horse-drawn buggy in Old Havana on a monthly salary of $11 that is multiplied many times over by tips. With two of his four sons along with him, he acknowledges that he risks being fired under Raul's reforms. "We will deal with that if it comes," he says, before revealing an ambition to open a paladar – the name of the private restaurants permitted to serve tourists: "I will be the waiter and my wife will cook." But he echoes the worries many others have.
"The pillars of our country are all gone – coffee, sugar, rum – they aren't good any more," laments Fran, 66, once a farm labourer who now earns $4 a month as cabaret singer for the state aviation institute. He too is lucky as the holder of one of Fidel's original licenses to entertain tourist groups. He sings old Beatles' numbers at a creaking paladar on a river outside Havana. Fran tells me something that would be hard to credit were we not in Cuba where nothing seems too bizarre. He claims his son Ojani was married in the early 1990s to Jennifer Lopez. "I told him not to worry about the money and just leave," he says with a smile of obvious chagrin. He is pessimistic about the Raul reforms. "So, the people will be allowed to work for themselves and have their own business. Yes, fine. But how do you that without any money? We have no savings."
"It will all come from Miami," says a US businessman who has permitted business dealings in Cuba. In spite of the embargo, the US is Cuba's fifth trading partner. This is why the relaxation of the rules on money remittances to Cuba by Obama are seen by some as crucial, because those dollars may fuel the nascent free enterprise sector.
Few in Cuba, however, expect the embargo to end soon and most react sceptically to the idea that when Fidel dies, Uncle Sam will come with dollars and cruise ships and take the island for itself. "I don't think that the Americans want another mortgage," says Mr Barnet, the union leader. "We have to do this for ourselves."
More important now, with the Communist Congress around the corner, is if ordinary Cubans think it can be done. That they want to have faith is clear and they don't need rooftop parties to feel the breeze of possible change. But the gap between Raul's promises and free enterprise taking root is wide and fear still reigns over hope. "This," says a diplomat "is their last chance, because the country is in dire shape."
Five Revolutionary Decades
2002: The US Naval base at Guantanamo Bay on the island takes on new prominence as a prison for detainees in the wars in Afghanistan and against terror.
1962: Cuban missile crisis. The USSR and USA come to the brink after Moscow deploys nuclear missiles on Cuba at Castro's request. Kruschev later agrees to remove them.
1961: The US-supported Bay of Pigs invasion by Cuban exiles fails. Castro declares Cuba a communist country and allies it with Moscow. The US breaks off all relations.
1959: President Fulgencio Batista is driven from Cuba and Fidel Castro, leader of the revolution, becomes the President. Raul, his brother, is deputy and the Argentine revolutionary Che Guevara is named third in command.
Cuba-China trade recovers in 2010Published February 10, 2011EFE
Havana – Trade between China and Cuba totaled $1.8 billion last year, posting a recovery from 2009, official figures released Thursday in Havana show.
Bilateral trade grew by $300 million in 2010, compared to the previous year, even though it continued to be affected by the global economic recession and other factors, Chinese Ambassador to Cuba Liu Yuquin said.
Beijing's goal is to diversify trade with Cuba, which mainly sells China sugar, rum and biotechnology products, the diplomat said in an interview with the weekly Opciones.
China's exports to the Caribbean nation are dominated by automobiles, buses and appliances, such as televisions and refrigerators, Liu told Opciones.
China is Cuba's second-largest trading partner, trailing only Venezuela.
Bilateral trade totaled about $1.55 billion in 2009, down 31.5 percent from 2008, when it reached $2.2 billion.
Ambassador Liu praised the advances made in bilateral cooperation, citing the opening in February 2010 of Shanghai's Gran Melia Hotel, which was constructed by Chinese state-owned company Xintian (Suntime) and Cubanacan.
The hotel was the first to be managed in China by Spanish hotel chain Sol Melia.
Cuba and China plan to build a $117 million luxury hotel on the island in Havana's Marina Hemingway.
Castro y los blogueros de CubaDe Luis Ayllón (el 09/02/2011 a las 20:29:53, en Cuba)
20 de Octubre de 2009. Un grupo de periodistas españoles esperábamos en el hall del Hotel Melia Cohiba de La Habana a que nos informaran de una de las reuniones del ministro Moratinos con las autoridades cubanas. Muy cerca de nosotros, completamente ensimismada en su tarea, Yoani Sánchez se aplicaba para conectarse a Internet y colgar su última aportaciones en su blog "Generación Y". Venía con todo preparado para aprovechar al máximo la hora de conexión que le costaba 6 dólares, una cantidad bastante respetable para un cubano viviendo en La Habana. Hace unos años, ni siquiera habría podido entrar en el hotel, porque estaba prohibido a los cubanos.
Ella misma no podía ver el resultado de su trabajo, porque el régimen mantenía bloqueado el acceso a los portales "Desde Cuba" y "Voces Cubanas", donde está alojado su blog. Pero ni eso ni la presión del castrismo le desalentaba. Así ha seguido durante mucho tiempo. Ahora, Raúl Castro ha decidido desbloquear los portales, donde pueden verse treinta blogs de disidentes.
¿Hay que felicitar a las autoridades cubanas por ello? Seguramente habrá quien piense así. De la misma forma que el Gobierno español está muy satisfecho de que hayan sido liberados unos 60 presos de conciencia y cree que la Unión Europea debe por ello suspender la Posición Común y establecer un acuerdo bilateral con La Habana.
Pero ni en un caso ni en otro, el régimen debe ser aplaudido por devolver la libertad a quienes se la robó. Llevándoles a la cárcel o censurando el acceso a los blogs. La propia Yoani Sánchez ha hecho un comentario en este sentido y no termina de creerse que esto no sea una simple medida coyuntural, que termine de un día para otro.
Además, muy pocos cubanos tienen acceso a Internet. Después de todo, la dictadura sigue sintiéndose dueña de la vida de los ciudadanos de la isla. Suelta a los presos cuando lo considera conveniente, mientras hostiga a los disidentes o les impide recoger los premios que se les concede fuera de Cuba, como sucedió con Yoani Sánchez o Guillermo Fariñas. Por eso, iniciativas como la de los siete diputados noruegos que han nominado al impulsor del proyecto Varela, Oswaldo Payá, para el premio Nobel de la Paz merecerían el respaldo de los gobiernos democráticos.
Real Estate in Cuba – Still no "groundbreaking" eventsPosted November 30, 2010 by Publisher in Business In CubaRob Sequin | Havana Journal
Over promise and under deliver should be the slogan of Leisure Canada.
Perhaps this phrase could serve as a warning to other Cuban real estate developers looking to start projects in a timely manner on Cuban land.
Of course the Cuban government doesn't do many things quickly and I'm sure this is partially to blame for the extremely long delay regarding Leisure Canada's development projects in Cuba but when it comes to hyping, perhaps even misrepresenting Leisure Canada's state of real estate development in Cuba, the company is squarely to blame.
Cuba's Real Estate Developer – NOT
Publicly traded Leisure Canada (CVE:LCN) has been touting itself as "Cuba's leading Real Estate Developer" for many years yet the company has never broken ground in Cuba. That slogan was prominent on their website until recently yet the moniker lives on as the title of the website's home page. Now it claims to be the "A leading Cuban investment company" and prominently features this image below.
Really? An investor's paradise?
Interim Consolidated Financial Statements for the three and nine months ended September 30, 2010 and 2009 show total revenue of $93,680 with a net loss of $3,139,032. That's one heck of an investment! The four largest costs are salaries, rent paid to Cuban government agencies, general office costs and professional services. Other significant costs are telecommunications and travel.
Also, a severance package of $226,000 was paid to former Executive Chairman Wally Berukoff, now with Red Lion Management.
Don't get me wrong. I am pro-Capitalist and have no problem with any company investing in future projects or venture capital investing in a start up business but Leisure Canada is not a start up. It's a publicly traded company and the company is burning through stockholder value and not just venture capital.
The recent press release titled Third Quarter Results regarding its real estate development projects states that the architectural, engineering and concept design plans for their hotel development project, in Havana's Monte Barreto district, have been approved by the Cuban authorities.
However, In April 2007, almost four years ago, the company was granted surface rights to the Havana land with a statement saying this would lead to "groundbreaking of the 238-room Phase One by end of 2007" so this item is not news. The press release also states that the company has not even begun to even solicit proposals from contractors to begin construction. This would appear to be a misrepresentation of the facts.
A positive comment about the Cuban government approving 99 year leases in the press release is a newsworthy event for Leisure Canada yet the stock price barely changed on this major announcement.
The release stated "This paves the way for consumers to acquire leasehold real estate in Cuba under competitive financing conditions similar to other offerings in Mexico and the Caribbean." I don't know about other offerings in other countries but we all know Cuba is not like other countries so to compare real estate in Cuba to real estate in Mexico and other Caribbean countries also appears to be hype or at least a misrepresentation of common sense.
Management's Discussion and Analysis for the three and nine month periods ended September 30, 2010 as of November 25, 2010:
The Company's net loss and net loss per share for the nine month period ended September 30, 2010 was $3,135,837 and $0.02 (per diluted share), respectively, compared with $1,011,068 and $0.01 (per diluted share) during the same period in 2009. The significant changes period over period relate to the increase in consulting fees related to the hiring of a new CEO and CFO, the recognition of stock based compensation for new options issued in 2009 and 2010, legal fees incurred with respect to the termination of certain agreements with the former Executive Chairman of the Company and with companies controlled by the former Executive Chairman, and the settlement reached with the former Executive Chairman.
Seems to me like the only people making any money from an investment in Leisure Canada is the senior management and consultants.
New Management Team
>>>In June, long time CEO and Chairman Wally Berukoff stepped down as Chairman of the Board early October. Apparently this was the beginning of the transition to the new management team.
>>>Ned Goodman of Dundee Corporation was brought in as Chairman recently in October. In January his company was retained at a cost of $200k for consulting services.
>>>Robin Conners was named in as CEO in August 2009 but may not have had control of the company until Mr. Berukoff resigned in June.
Leisure Canada Summary
Perhaps the company is in transition now that Mr. Berukoff is gone. If so, they have the burden of the past to overcome. However, they should also have the benefit of a ten year history of project planning (not development) in Cuba. So, breaking ground on any project in Cuba would certainly be a victory for Leisure Canada. However, should another Cuban real estate developer break ground on a major project before Leisure Canada does so in Cuba, I think that would be seen as a huge failure in the company's current management.
You can see all the Leisure Canada press releases if you want to follow the financials and management changes.
Cuba Real Estate Development Projects
The Company and its joint venture, Bellavista Resorts SA has registered surface rights and development rights. Complete architectural, engineering and concept design plans have been approved by the Cuban authorities and all three phases of this project will be built concurrently. Specifications and project information have been compiled in order to begin a Request for Proposal process to select a general contractor.
The Company is also studying alternatives to underground parking and is working on detailed design components of the project and establishing a proactive value engineering analysis. Under the development agreement reached with the Cuban government, the Company through its subsidiary Wilton Properties Inc. has to match in costs the value of the land contributed by the Cuban Government of $10,350,000, after which costs on the project will be split 50-50.
The Company is continuing discussions with the Cuban authorities and officials in charge of tourism and foreign investment regarding the approval of certain feasibility studies submitted to the Cuban government and clarifying the recent announcements from the Cuban government allowing the construction and sale of residential real estate associated with resort and golf projects. The Company is awaiting the formal approval from the Cuban authorities on the preliminary master plan and development program for Jibacoa. The specific joint venture for this property has been created and the Company is renewing its development rights and is proceeding towards the registration of its surface rights in light of the new 99-year residential leases recently announced by the Cuban government.
In September 2009, the Company received the authorization from the Cuban Government on the preliminary master plan and renewed development rights and to proceed with the land development process on 260,000 m2 of beachfront property and in December 2009, the Company received site approval. We have commenced program design for an eco-resort of approximately 400 rooms and the Company is currently engaged in economic feasibility studies. The Company is proceeding with the creation of a specific joint venture for this property and the registration of its surface rights.
Risks and Uncertainties
Taken from same Management Discussion paper, "The Company's financial position and its development projects may be affected by political or economic instability. These risks include exposure to fluctuations in currency exchange rates and high rates of inflation. While the Cuban Government is currently seeking to encourage foreign investment by removing certain restrictions on foreign investments and permitting foreign entities to repatriate profits from Cuba, there can be no assurance that this trend will continue.
Operations may be affected by varying degrees by such factors as government regulations with respect to price controls, income taxes, expropriation of property, environment legislation, land use, water use and land claims of Cuban nationals. The effect of these factors cannot be accurately predicted.
The Company is also dependent on the Cuban economy, which itself is highly dependent on external factors such as commodity pricing of oil and nickel, and the state of the world tourism market."
My comment – Is Cuba somewhat to blame here? Of course. There have many news story in 2010 about the Cuban government reviewing and/or approving a variety of new Cuban golf course and vacation resorts complemented by Cuban villas and real estate "for sale", none have broken ground yet. Trying to develop golf resorts in a Communist country with a centrally controlled economy is certainly like pushing a rock up hill. Leisure Canada should know this and not over-hype their development status. They are a publicly traded corporation with a responsibility to their shareholders.
Cuban Law and Commercial Practice
As is the case in many developing states, the commercial legal environment in Cuba is in a formative stage and accordingly, the legal rights of the Company and its subsidiaries may not be enforceable in Cuba to the same extent as they would be in a fully developed industrialized state, parliamentary democracy or market economy. The Company's Development Agreement with Cuba provides for arbitration of disputes in Cuba and Cuba has, in the past, properly submitted to commercial arbitration and agreed to abide by the results thereof, but there can be no assurance that it will do so in the future.
Also, since Gran Caribe is an agency of the Cuban government, it may make decisions with respect to the development properties which are driven by non-commercial considerations. There can be no assurance, therefore, that actions by Gran Caribe, in respect of the Company's joint venture, will always be in the best interests or consistent with the interests of the Company.
Under the Company's Development Agreement with Cuba, Wilton is responsible for obtaining 50% of the financing of each development project by way of third party debt financing, with the remaining 50% to be contributed equally by way of equity from Gran Caribe and Wilton. If Wilton is unable to obtain such debt financing on reasonable commercial terms, Gran Caribe and Wilton must contribute equally by way of equity, the entire amount required for such development project.
If either Gran Caribe or Wilton fails to contribute its portion of the required equity, the other party may make a loan to the defaulting party or may contribute the amount of the equity required directly to the subsidiary and subsequently dilute the defaulting party's share in such development project. There is no guarantee or assurance that the Company will be able to arrange third-party debt financing for 50% of the cost of each development project. There is also no guarantee or assurance that the Company will have or be able to raise the amount it will be required to contribute to any given development project in equity.
If Wilton is unable to contribute its equity portion to any given development project, Gran Caribe is entitled under the Development Agreement to dilute Wilton's interest in such development project. There is also no guarantee or assurance that Gran Caribe will have or be able to contribute its portion of equity required to finance any given development project, in which case Wilton would be required to contribute the entire amount required to finance the development project. There is no assurance that the Company will have or be able to obtain the equity required to any development project on its own.
The Company has made significant progress in arranging prospective sources of financing for its development projects, but definitive terms and conditions, and agreements reflecting these, have not been finalized. There is no assurance that those terms, conditions and agreements acceptable to the Company will be completed on a timely basis.
US Laws Relating to Cuba
The various U.S. laws and regulations establishing the embargo have been amended from time to time, including the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996, also known as the Helms-Burton Act ("Helms-Burton Act"), which extended the reach of the U.S. embargo. As a result, the Company is affected by these changing political and legal relationships between the U.S. and Cuba. Although the Company monitors and analyzes the potential impact of any anticipated changes and generally prepares to capitalize on any future opportunities or mitigate any increased risks, there is no assurance that the Company will not be adversely affected by changes in U.S. laws.
The Company is currently prohibited from accessing U.S. capital, debt, customers and suppliers, which limits its ability to mitigate the financial risks described above.We have made every effort to ensure that the Company's development projects are located on land which will not be subject to a claim which has been certified by the U.S. Foreign Claims Settlement Commission, the body responsible for dealing with U.S. nationals whose Cuban properties were confiscated by the Cuban government. However, there is no assurance that claims will not come to the attention of the Company or the U.S. government in the future.
The Company and its subsidiaries do not hold assets located in the U.S. The Foreign Extraterritorial Measures Act (Canada) provides that any judgment given under the Helms-Burton Act will not be recognized or enforceable in any manner in Canada. It also allows a Canadian corporation to sue and recover, in Canada, any loss or damage it may have suffered by reason of the enforcement of a Helms-Burton Act judgment abroad.
So, are you ready to buy some Leisure Canada stock? Are you ready to invest in Cuban real estate development projects?
The Carbonera Club project has been offering Cuban villas for sale yet there is no groundbreaking date for that project that I know of. To be fair, I have not heard of ANY groundbreaking of any new golf, course, marina or resort project in Cuba.
The biggest hotel owner/manager is Sol Melia in Cuba. I don't think any foreign company comes close to Sol Melia with regards to a foreign business in the tourism industry. The company will be opening yet another Cuban hotel by the end of this year.
Since joint ventures are required for ALL development projects and since qualified large-scale construction contractors in Cuba are selected by the Cuban government, we may not see any ground breaking on any project for not just months but perhaps years.
Sol Meliá to open hotel No. 25 in Cuba
Spanish Hotel operator Grupo Sol Meliá will open its hotel No. 25 in Cuba on Dec. 1.
The Meliá Buenavista on Cayo Santa María, on Cuba's north-central coast, is designed for all-included package tourism. It includes 104 suites, three restaurants and three bars. Sol Meliá now manages 1,688 rooms in four hotels on Cayo Santa María.
Cuban trade with China falls by a thirdHavana May 31, 2010. REUTERS/Desmond Boylan
Further evidence of how much island is slashing spending amid crippling economic woes
Havana — The Associated Press Published on Tuesday, Jun. 01, 2010 2:07PM EDT Last updated on Tuesday, Jun. 01, 2010 2:20PM EDT
Cuba's trade with China fell by nearly a third in 2009 to about $1.5-billion (U.S.), further evidence of just how much the island is slashing spending amid crippling economic woes.
China's ambassador to Cuba, Chen Feng, told Havana's state-run weekly magazine Opciones that his country's economic ties to Cuba were down 31.5 per cent compared to the previous year.
But in the remarks published Monday, he also announced plans to collaborate with Cuba on a new luxury hotel on Havana's western outskirts that will cost about $117-million and be built later this year.
It was not clear if the 2009 trade figure included $78-million in credits, donations and hurricane relief Chinese President Hu Jintao promised during a November 2008 visit to the island.
The drop in 2009 was consistent with sharp tumbles in Cuban imports from other major trading partners such as Venezuela and Spain, as well as food and farm products it is allowed to receive from the United States despite Washington's 48-year-old trade embargo.
Cuba's economy is struggling to overcome a triple-whammy of bad news: Three major hurricanes did more than $10-billion in damage in 2008, the global economic crisis dampened tourism and a drop in commodities prices hurt nickel sales for much of 2009.
China is Cuba's second-largest trading partner behind Venezuela, where socialist President Hugo Chavez helps keep the Cuban economy afloat by providing more than 100,000 barrels of oil per day in exchange for island doctors, who provide free medical care in his country, and other social services.
The economic ties to Beijing have brought many tangible benefits to Cuba, including about 4,000 new Yutong buses that have replaced smoke-belching, Soviet-era buses.
Chen said Cuba will continue importing Chinese goods, primarily for its electrical industry, as well as communications, transportation and agriculture.
The money for the new 650-room resort at the Hemingway Marina on Havana's outskirts will be financed 49 per cent by Cuba's government and 51 per cent by China, the ambassador said.
El presidente de la compañía hotelera española Sol Meliá, Gabriel Escarrer, envió este miércoles una placa de agradecimiento a Fidel Castro por "su impulso al turismo", informó la agencia oficial Prensa Latina.
Escarrer entregó la placa en el Hotel Meliá Cohiba, de La Habana, al ministro cubano de Turismo, Manuel Marrero, en un acto por los 20 años de la presencia de la cadena española en la Isla.
"Los que abren caminos y fundan visionariamente el futuro privilegian con su luz y convocan con su ejemplo. Al Comandante en Jefe, Fidel Castro Ruz, Fundador Honorífico del Hotel Sol Palmeras", dice el texto de la placa.
Sol Meliá inauguró el 10 de mayo de 1990, en Varadero, su primer hotel, Sol Palmeras. Fidel Castro asistió a la ceremonia de apertura.
Según Prensa Latina, Escarrer elogió la "disposición y ayuda de Fidel Castro" al desarrollo del turismo y agradeció también el "apoyo" del general Raúl Castro.
El ministro Marrero regaló a Escarrer un cuadro con la página del diario oficial Granma del 12 de mayo de 1990, donde se anunció el inicio de los contactos entre la cadena y La Habana y del principio de la inversión extranjera en la industria turística cubana.
A la ceremonia asistieron también el vicepresidente de Sol Meliá, Sebastián Escarrer, y el Director General de la División Cuba de la empresa, Gabriel Cánaves, junto a directores de cadenas, turoperadores y expertos en turismo.
Sol Meliá gestiona actualmente en Cuba 24 hoteles de cuatro y cinco estrellas (10.361 habitaciones), la mayor presencia del grupo hotelero en el Caribe.
Cuba readies for US tourists with luxury hotelsPublished on Saturday, March 27, 2010By Jonathan J. Levin
CANCUN, Mexico (Bloomberg) — Cuba's hotels could manage a sudden influx of 1 million American tourists if the US Congress lifts its 47-year ban on travel to the Communist island, Tourism Minister Manuel Marrero said.
Additionally, the Caribbean nation is set to expand its capacity of about 50,000 rooms, with groundbreaking scheduled for at least nine hotels in 2010, Marrero said. About 200,000 rooms may be added in the "medium to long-term," he said. Cuba is also seeking investment partners for 10 golf courses and luxury hotels aimed at Americans, according to a ministry official.
"I'm convinced that today, with the available capacity, we could be receiving the American tourists without any problem," Marrero said in an interview yesterday in Cancun, Mexico where he was attending a conference of 40 American and Cuban tourist industry representatives.
The tourism industry meeting comes as the US Congress considers a law that would lift the ban on travel to Cuba. Senator Byron Dorgan, one of 38 co-sponsors of the bill, said he has 60 votes lined up to win passage of the measure this summer. Similar legislation introduced in the House has 178 co-sponsors and needs 218 votes to pass if all 435 members vote.
"This is a 50 year-old failed policy," Dorgan, a North Dakota Democrat, told the meeting yesterday in a phone call from Washington. "Punishing Americans by restricting their right to travel just makes no sense at all."
President Barack Obama said March 24 that he's seeking a "new era" in relations with Cuba even as he denounced "deeply disturbing" human rights violations by its government. He did not say where he stands on lifting the travel ban.
Obama last year ended restrictions on Cuban-Americans traveling to Cuba and transferring money to relatives back home. The US State Department has also held talks in Havana with Cuban officials about restoring mail service and cooperation on migration issues.
Tourism to Cuba increased 3.5 percent amid the global financial crisis to 2.4 million visitors last year, with 900,000 visitors from Canada leading the way, Jose Manuel Bisbe, commercial director for the Tourism Ministry, said in an interview this week in Havana.
Bisbe expects foreign arrivals to grow by a similar amount this year. If the US travel ban is lifted, hotels won't be overburdened because Americans will visit year-round and face capacity problems only during the winter high season when occupancy reaches 85 percent, he said.
"Havana has been the forbidden city for so long that it will be a boom destination even in the low season," said Bisbe, who estimates Cuba will add another 10,000 hotel rooms in the next two or three years.
Daniel Garcia, who has sold tourists used books in Old Havana since 1994, said more Americans would be good for business.
"The gringos can't help but spend their money," Garcia, 43, said at his stand in front of the neo-classical building that housed the US Embassy before Fidel Castro's 1959 revolution. "They are the easiest tourists to sell to. They never ask for discounts."
Marrero said the government can't finance development of tourist infrastructure on its own so it's scouting for foreign partners such as Majorca, Spain-based Sol Melia SA, which already manages 24 hotels on the Communist island.
"The Cubans have provided us with a fairly complete picture of their tourism product and future opportunities for US businesses to work in this market," Lisa Simon, president of the Lexington, Kentucky-based National Tour Association, said in an e-mailed statement. "We look forward to a follow up conference next year in Cuba, should the legislation pending in Congress be approved."
U.S. Travel Sector to Meet Cuban Officials in CancunTo Discuss Travel Potential
LEXINGTON, KY, January 21, 2010 – Dozens of representatives of the U.S. travel sector will meet with their Cuban counterparts in a public forum to discuss the potential for travel between the U.S. and Cuba.
This historic gathering is being organized by Alamar Associates in association with the NTA and sponsored by The United States Tour Operators Association (USTOA). Other sponsors to date include Marazul Charters, Vigilant Worldwide Communications, and The Americas Group.
A Cuban delegation of more than 20 officials and travel specialists traveling from Havana will include ministry officials as well as representatives of all of the major Cuban travel/tour operators.
"Over the years, these Summits have proven useful and successful in providing U.S. company executives practical information about how to do business in Cuba and whom to contact," said Kirby Jones, president of Alamar Associates.
More than 100 attendees from the United States are expected to convene in Cancun including tour operators, cruise line executives, hotel representatives, tourism developers and investors and airline officials. "This meeting will allow NTA members and others to meet their Cuban counterparts and give them a leading edge in learning about the business opportunities in Cuba," said Lisa Simon, president of NTA, which has long supported the freedom to travel to Cuba.
In a statement to the organizers of the U.S.-Cuba Travel Summit, Senator Byron Dorgan (D.ND), the lead sponsor of the Senate bill to lift restrictions to travel to Cuba, said, "As sponsor of the 'Freedom to Travel to Cuba Act' to allow all Americans to visit Cuba, I wish the participants the very best when they come together in Cancun at the US-Cuba Travel Summit. This meeting between US travel executives and their Cuban counterparts is a valuable first step for American companies and organizations to learn how things will work when Cuba is open to American tourism."
The Conference agenda will include presentations by the Cuban ministry officials and officials of the major U.S. travel associations; panel discussions on the travel industry potential; practicalities about how to prepare for business in and with Cuba; what Cuba offers; experiences of firms already doing travel business in Cuba; and prospects for changes in the U.S. laws.
In addition, there will be breakout sessions on all aspects of travel in Cuba and more than two days for U.S. participants to talk informally and personally with all officials from Cuba.
"We are strong supporters of open travel to Cuba and the current bills in Congress to lift restrictions," said Bob Whitley, President of USTOA. "We view this gathering as a clear signal that travel to Cuba is important to the growth and development of our US travel industry."
This is the 10th such U.S.-Cuba business gathering that has been organized in Cancun by Alamar Associates. Overall, more than 400 U.S. executives have been able to meet their Cuban counterparts in such sectors as food and agriculture, energy, general business, and travel.
Full details about the US-Cuba Travel Summit can be found at www.uscubasummit.org
NTA is the preferred association in the tourism industry for packaged travel professionals. NTA strives to provide value for its members by advancing the packaged travel industry through its advocacy efforts and progressive leadership. Connecting its members through business development, government relations, professional development and research, NTA has remained committed to serving its members with integrity and quality service since its founding in 1951. Today, the NTA membership represents 48 countries, and includes tour and travel packagers of all types. To learn more about the most important destination for packaged travel professionals, please visit www.NTAonline.com.
HotelExecutive.com – Newswire – U.S. Travel Sector to Meet Cuban Officials in Cancun (21 January 2010)http://hotelexecutive.com/newswire/31546/u-s-travel-sector-to-meet-cuban-officials-in-cancun
Descuentos en hoteles de Cuba, de Sol Meliá19 Noviembre 2009 Sin Comentarios
La cadena hotelera Sol Meliá está ofertando un descuento del 40% sobre el precio del alojamiento en todos sus hoteles en Cuba para este invierno, siempre que la reserva del mismo se realice antes del 21 de diciembre próximo.
"Vacaciones en Cuba", nombre con el que se conoce esta promoción, incluye hasta 20 resorts Meliá en los principales destinos de Cuba: Varadero, Cayo Santa María, Cayo Coco, Cayo Santa María, Cayo Guillermo, Cayo Largo del Sur y Playa Esmeralda en Holguín.
Descuentos en hoteles de Cuba, de Sol Meliá (19 November 2009)http://diariodeunturista.com/descuentos-en-hoteles-de-cuba-de-sol-melia/3026