Boating and Cuba: Big ifs could provide big opportunities

Today in the second installment of our two-part series, we discuss the potential opportunities that exist for the boating industry if the trade embargo with Cuba is lifted and tourism is approved. Part one summarized the current state of affairs between the U.S. and Cuba and how the industry is currently affected.

While it is important to emphasize how hypothetical these scenarios are, it is also worth noting the possibilities the boating industry could have within Cuba: If the trade embargo were lifted and if the Cuban government supported and approved private enterprise, Cuba could become an excellent export opportunity for boat businesses looking to increase their international portfolio.

Some infrastructure already exists within Cuba to accommodate a nominal amount of boating activity between the U.S. and Cuba, said Balzano.

“As demand would grow, so would the need for supply in terms of further marina developments, shipyards, servicing, provisioning, maintenance and the United States is certainly well positioned to take advantage of those opportunities when and if the time comes,” said Balzano.

In addition, as the nearest Southern neighbor of the U.S. to the southeast with 1,400 miles of coastline and clear boating waters, Cuba would become a natural vacation choice for many Americans. As of now, travel restrictions still exist for solely touristic purposes.

One company taking the first steps toward developing boat activity is CubaKat, which is starting a ferry service between the two countries. The service will be purchasing used ferries to start and KonaCat will be building 100-passenger catamarans for CubaKat.

As of now, CubaKat has two corporations from which they can run the ferry service. The first is a 401(c) non-profit to service other non-profits, i.e. churches and school, which does not need an OFAC license to run. CubaKat has also filed a license application with OFAC to operate under Cuba Kat, LLC., as a for-profit company. Brian Hall, president at CubaKat, said the company hopes to hear back on the license in the next two months, get a security plan approved for ferry operations in Marathon, Fla., and start the service in September.

“Starting out, I will only be able to take 400 [passengers] per day. Currently we average over 10,000 hits per day on our website and over 100 call per day, and we have not started yet. The demand is going to be off the charts,” said Hall. “The demand will be greater than the capacity for some time. It will be good for everyone.”

Hall said he launched the service because the opportunities in Cuba are unlimited, as over 2.5 million passengers traveled from Key West to Havana by ferry in 1955 alone.

“Cuba is ready for Americans but the U.S. is slow to allow things to happen,” Hall said. “I firmly believe that opening up Cuba to entrepreneurs will do more to change hearts and minds than politicians could ever do.”

Laursen said companies, particularly in south Florida, should treat the easing of relations between the U.S. and Cuba as an opportunity to market boating for families and create campaigns around the benefits of traveling to the island by boat instead of by plane, should the travel restrictions be lifted, as it is a quick 90-mile trip from Florida.

“Right now people are going from south Florida to Bimini or the Bahamas, but once it opens they are all going to be going to Cuba. I can see [Cuba] being the most popular place that it was in the 1950s,” said Laursen. “I think the boating industry needs to put all their resources on Cuba. It would be a tremendous boom for the whole industry if they open [tourism] up.”

Laursen and Balzano agreed that it would be advantageous for businesses to market boating specifically to Cuban Americans as a way to encourage family vacations to Cuba by boat, which would create a new base of boaters who are willing to invest in the boating lifestyle.

From this perspective, Balzano said it would be beneficial for manufacturers to focus on building fuel-efficient, value-based products that appeal to consumers who would consider Cuba as a weekend destination if tourism opens up, and it would be more affordable than consistent air travel.

“I think once Americans are allowed to travel for purely touristic goals and reasons and once we can travel to Cuba by boat, I imagine that there’s going to be a lot of people that will consider doing so by water as opposed to by air,” said Balzano. “There’s a lot of Cuban Americans that I think would like to travel back and forth. If they have an affinity to boating, perhaps an affordable product that will allow them to do that might become an alternative to air travel.”

Both countries would benefit economically from that level of tourism, said Balzano. She also added that as commercial airlines are negotiating with the U.S. government for permission to fly between the two countries, the boating industry needs to remain just as active in gaining the same permissions.

“Ferry services back and forth between the U.S. and Cuba are also looking at receiving the same permission and the NMMA [is] monitoring this because we want to ensure that as laws are put into place and permission is granted for different types of travel back and forth to the island, that traveling back and forth by boat also be kept in the conversation,” said Balzano.