The problem of bringing in tourism from distant markets is that a large part of the “holiday package” that a traveler pays for is kept by the airline. The problem gets worse if the country doesn’t have airlines that are able to absorb most of this traffic.
The natural and most profitable market for Cuba is the US but it is forbidden by a blockade that stops its citizens from visiting the island as tourists. The small openings in US-Cuba travel initiated by Obama are now being systematically plugged by Trump.
A large part of the revenue foreign tourists leave in Cuba resides in their spending once on the island, in restaurants, buying gifts, going on trips, recreation centers, drinks and transport, the latter being one of Cuba’s most profitable businesses.
Car rental companies buy a car for 8,000 USD and then rent them out to tourists for two years, raking in approximately 50,000 USD and then they sell them on the national market for 40,000 USD. Renting out 1000 cars brings in 80 million USD every two years. And I suspect that there are more than a thousand of these cars on the island.
There are few businesses in Cuba that are so lucrative as that of renting out cars, so much so that some Cubans with the financial means buy used cars, Kia Picanto or Hyundai Atos, for 40,000 USD and then secretly rent them out to tourists.
However, renting via State companies is really a headache, there are dozens of different directives to complicate the customer’s life, a lack of coordination, gasoline theft, cars in a poor technical state and poor service when there are breakdowns.
A few days ago, I experienced these “problems” firsthand.
To begin with, they told us that we couldn’t rent a car in Cuba, we needed to make the reservation from abroad. Later, we found out that this wasn’t true and we saw Cubans renting out cars in front of our own eyes.
When we rented one of these cars from abroad, we weren’t allowed to have one for a month, thereby forcing us to make two 15-day contracts with agencies belonging to the same company but located in two different points of Havana.
At the first agency, we had to wait 4 hours for our car but we should be happy because there were other people there who had been waiting 10 hours in spite of them having booked and paid for the car from abroad, several weeks in advance.
In the face of our complaints, the employees there blamed foreign tourism companies who, according to them, rented out more cars than what the country physically has. I got in touch with the Spanish agency and, miraculously, our car immediately showed up.
The state of the cars was pitiful, one of them stopped working and not even a mechanic could fix it. The agency’s boss informed us that the tourist needs to be with the car until the tow truck comes, “because that’s what’s stipulated in the contract.” Five hours later, there was still no sign of the tow truck.
We rented 4 cars from two different agencies during that time and there were 5 liters of gasoline invariably missing from each of them. When we complained, they brought along a policeman who told us that the rental company was “a State institution and therefore its employees were public servants.”
The policeman thought my companions were kicking up too much of a fuss for 5 liters of gasoline but he changed his mind once we did the math: in renting out 100 cars per day, about 700 USD were disappearing in fuel, 21,000 USD per month or a quarter of a million dollars per year!
It seems that some car rental agency employees receive higher wages than the average Cuban salary, more than enough to live. If that’s the case, wouldn’t you expect them to at least do a more efficient job that would leave tourists happy?
In this case, we’re not talking about the US blockade or the blockade of Cuban bureaucracy, but the blockade that we ourselves impose, by killing the chicken that lays golden eggs, doing an awful job, creating unease and driving tourists to never come back to Cuba.
Who loses out? The State loses as it will collect less money; the country loses when resources for healthcare, education and culture decline; and even the car rental agency’s employees lose out, who will have a much harder time to “resolve” their situation and make a bit extra.
Translation: Havana Times