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New ventures in tourism sector reaffirm long tradition of business relations between Germany and Cuba

New ventures in tourism sector reaffirm long tradition of business relations between Germany and Cuba

Photo: courtesy of the interviewed

Exclusive interview with Mr. Gunther Neubert, representative of the German Office for the Promotion of Trade and Investment in Cuba.

By way of introduction, it would be convenient for you to give a summary of how commercial exchange between Cuba and Germany is doing.

Business relations between Germany and Cuba have a long tradition. More than 60 German companies are frequently doing business with the largest of the Caribbean islands, covering a wide range of business sectors. Nevertheless, U.S. sanctions and, as a consequence, Cuba´s decreasing liquidity have a strong impact on the actual bilateral merchandise traffic.

Unfortunately, the volume of trade between Germany and Cuba is therefore at a standstill at a low level. In 2018 and 2017 the volume of the traded goods between Germany and Cuba was just 274.4 million euros and 282.3 million euros. The most important goods Cuba is exporting to Germany are alcoholic beverages, tobacco products, honey and fruit and vegetable juices. Germany supplied mainly machinery, chemical and pharmaceutical products, plastic products, medical technology, motor vehicles and spare parts.

An example of the success achieved between both countries is the recent constitution of the company PASI Mariel Service, S.A. and its establishment as a user of the Mariel Special Development Zone (ZED Mariel), which is the first German investment in this place. This new investment in the form of a totally foreign capital company, has as its objective the construction of a factory for the production and assembly of industrial valves, hydraulic and pneumatic systems, dynamic equipment and further services.

Another important sector in which German companies are strongly represented is the energy sector. Last year, the foundation stone was laid for a solar park, which is being built by a German company with one hundred percent foreign capital. We promote and support the engagement of German companies in the energy sector with yearly business trips and an investment-conference about investment opportunities in Cuba.

What forms of foreign investment or joint ventures are being developed or planned in the midterm in the tourism and hotel sector?

In total we have 14 German companies, which are operating in the tourism sector and have an office in Cuba. They maintain a good level of visitors per year which has made it possible for Germany to occupy third place after the U.S. and Canada despite the decline in visitor numbers during the year 2019. Germany has more than doubled its visitors from 116,000 in 2013 to 243,000 in 2017. Although the decline in 2019 Germany is still the biggest origin of tourist in Europe who are visiting Cuba.

The Cuban Government has ambitious plans regarding the extension of its tourism sector. According to the Ministry of Tourism, a total of 40 hotels with 18,000 rooms are currently being built or renovated. 103,000 rooms are to be available by 2030. German companies are e.g. involved by providing specific hotel equipment or renewable energy solutions for the hotel industry.

There are also a few projects in progress, for example from the German enterprise BERmeeCU, which is planning to build and manage a 30,000 sq m Globo Parque with many attractions like a rising captive balloon, a 360° panorama tower an open air theatre and bars and restaurants. Directly situated at the harbor entrance, with unspoiled view of the area and Old Havana.

For decades, Germany has remained among the principal issuer of visitors to Cuba; in 2019 it closed in fifth place, despite the de annual decrease in tourists (16.1%). To what extent do you consider a recovery in the flow of arrivals to the island would be possible?

Although the outlook regarding the next winter season promises a certain growth compared with the winter season 19/20, the forthcoming reduction of charter flights, especially to Varadero and Havana, caused by the withdrawal of the German Airline Eurowings as of May 2020 may have negative effects for the summer season 2020. But besides the need of sufficient nonstop flights between Germany and Cuba´s major tourism destinations, the recovery of the visitor flow to the island will depend on the improvement of the quality-price ratio.

Furthermore, there is a need for more specific tourism offers. Although we already consider an increasing number of smaller tour operators and incoming agencies providing E-Bike and motorcycling tours or yacht charters, there is a huge potential in the health tourism sector, where Cuba can offer high standard infrastructure combined with highly qualified medical staff.

The start of the 2020 cruise season with the entrance for the first time of a German ship, the MS Europa 2, and that other ships of this nationality will put in at Cuban ports this year has had extensive media coverage. What can you advance us about this aspect?

As announced, following the arrival of MS Europa 2 to Havana, Isle of Youth and Santiago de Cuba last January, this would be the first trip of many cruise ships that are scheduled to arrive in Cuba.

MS Hamburg has announced an intensive Cuba-Jamaica tour in November which will include stops at the ports of Havana-Maria La Gorda-Cayo Largo-Cienfuegos-Santiago de Cuba and finally Montego Bay.

What are the perspectives for an increase in air operations between Cuba and Germany?

By 2020 it is announced that the airline Eurowings will cease flying to the island as of April. Its operations are scheduled to be resumed by Lufthansa, but considering that it will be at the end of the year this impasse will cause a “summer hole” since for 7 months it will only be possible to travel with CONDOR airline to Varadero and Holguín and as a third destination to Havana, this would bring about a decrease in the number of visitors from that country, according to tour operators who have specialized in the tourism market for Cuba for years.

This situation makes it difficult for tour operators and travel agencies to sell Cuba at a high percentage, since there is not enough capacity for direct flights, and it is not possible to sell packages that include hotels and tours of the island. For all the above reasons, it is not expected that by 2020 there will be an increase in the number of flights to Cuba, but rather a decrease.

What are the principal activities linking both cultures promoted by the German Office for the Promotion of Trade and Investment in Cuba?

The German Office for the Promotion of Trade and Investment in Cuba has been officially based in Cuba since January 2018 and belongs to a network of German chambers of foreign trade that are scattered throughout several continents of the world. Our main objective is to “connect markets,” we represent the interests of the German economy in the Republic of Cuba and we support trade and investment between the two countries.

Our main task is to advise and support German companies that wish to start or expand their business abroad. We promote the fairs and events that take place every year working together with FIRABARCELONA. We promote the commercial exchange between both countries, creating value to our clients through a platform of commercial, social and service contacts, as faithful representatives of German know-how and quality.

We organize business trips with the support of the Cuban Chamber of Commerce for all sectors of industry and commerce. A fundamental task is the constant link with the German companies located in the country in economic issues.

We carry out market studies for those businessmen interested in participating in investment projects or opening local representations. Likewise, we accompany and advise German companies interested in linking up with Cuban importing or exporting companies.

Our representation is the first and main link to start or maintain commercial business abroad. In this sense, our mission is to continuously watch over the most effective channel for new ventures between Germany and Cuba.