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26 North Team Explores Business Opportunities in Cuba

Posted by at 17 December, at 19 : 52 PM Print

26 North Team Explores Business Opportunities in Cuba

Since the recent announcement of major steps toward the normalization of relationships with Cuba, many American businessmen are wondering if it is time to explore opportunities on the Island. Probably none more so than those of us in South Florida — after all Cuba is only 90 miles away!

The SOFLA marine industry in particular has had its eye on our tropical neighbors for some time now. Even prior to the December 2014 announcement about easing restrictions, private yachts and non-American crew have been allowed to travel to Cuba. However, the recent change in travel restrictions for Americans may be a major boon to yachting and the yacht charter industry.

We decided to see if this was true for ourselves. My partner Nichols Scherb and I recently returned from a trip to Cuba that was sponsored by our local chapter of the Entrepreneurs Organization.

Our Journey Begins

On Thursday November 19th we met at Miami International Airport in Terminal G at 6:30 am. We arrived at José Martí International Airport in Havana at about 11:00 am. After clearing customs our group traveled to La Fontana Restaurant, one of Havana’s oldest Paladars, which are privately owned family restaurants. It was interesting to speak to the owners of these restaurants, which are one of the few privately owned businesses allowed by the government. The right to open a Paladar was usually given as rewards for “Service to the Party.”  The Paladars are family run, and are a microcosm of what entrepreneurship can bring to the Island. They tend to be cleaner, better equipped, and serve more upscale cuisine than the Government run restaurants, and are favored among tourists.

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First Impressions

Of course, for our purposes we were most interested in the Cuban Marinas. The government run Marina Hemingway, is Cuba’s largest marina with an official capacity of up to 400 vessels. We found the marina to be in a lot better shape than we expected. It was gated and well protected. There is a café and many services available.

There are still restrictions on taking a luxury yacht into Cuba. For example, you cannot “anchor out” in Cuban waters. You can only dock in one of the Marina’s, and you can only travel from Marina to Marina. However, the nautical byways make it very easy to do so.

Marina Hemingway has been much improved, and with on-going renovations it rivals any other modern Caribbean marina. It is secure, has all the amenities any captain could desire, and unlike other areas on the Island it has good internet connectivity and very stable power.

Tourists who are not subject to the same travel restrictions as Americans, have been enjoying all Cuba has to offer as a Yacht Charter destination for some time now, and that is actually quite a bit!

Geographically, Cuba rivals any Caribbean yachting voyage. It has an amazing variety of landscapes, from mountains to endless sandy beaches.

Cuba has a richness that predates the Castro Regime. Cities such as Trinidad, and of course, Havana, are renowned for their Spanish colonial architectural beauty. Cuba also has some of the most beautiful marine parks and preserves on the planet. The Jardines de la Reina Marine Park is a true ecological treasure. It is considered one of the world’s most well-preserved marine areas, and attracts thousands of divers each year.

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Beyond Marina Hemmingway, the island has a well-supported nautical infrastructure. There are about 20 marinas and other nautical service centers all around Cuba. They are ready to welcome sailors and yachtsman, offering all conceivable services and modern conveniences.

The Opportunities and the Realities

As you might imagine the biggest hurdles standing in the way of real opportunity for us, or any American business in Cuba are the many infrastructure issues. Other than in the top brand hotels, WiFi and internet connectivity is poor. Mobile phone service is also challenging, with the Verizon network about the only one with reliable service.

The same is true for electricity, other than in the best hotels, and the top Marinas, service can be a bit spotty, with frequent outages.

However, the Government is well aware of these issues, and is working diligently to upgrade infrastructure to promote foreign investors. Beyond that, there are actually many things that make Cuba very attractive to American investors. Cuba sits in a wonderful geographic location, and her people represent a highly skilled and educated workforce. Despite what you may think, they have a very stable political system, and a low crime rate. The Island also has a wealth of natural resources.

After seeing things first hand, I feel a lot of the “negativity” about doing business in Cuba, comes more as propaganda from the U.S. side, tied to the 50 years of the embargo and animosity.

 “Still Water” first American Yacht authorized to travel to Cuba in Marina Hemingway

“Still Water” first American Yacht authorized to travel to Cuba in Marina Hemingway

Cuba has a lot of potential to one day be a shipbuilding hub, similar to what we saw on our recent visit to Taiwan. The Cuban people are remarkable craftsman and mechanics, and once logistics and supply chain challenges can be smoothed out, Cuba may bring major shipbuilding back to our hemisphere.

 The Voyage Ahead

Back in March, at the Superyacht Summit, a panel entitled, Cuba: The Last Frontier, concluded that “once Americans are free to visit, the impact on yachting — not to mention the island — will be enormous.”

The greatest effect on the yachting world will be in the charter business. As yacht brokers, who also offer chartering opportunities, we know that about 80% of those we’ve sold yachts to are also interested in offsetting their expenses via charter. Easing restrictions on travel will increase the charter market in Cuba. That in turn will likely send a positive ripple effect throughout yachting, particularly to the South Florida maritime industry. But, the greatest impact will not be felt until the aforementioned infrastructure challenges can get sorted out.

It has been said that a rising tide raises all boats. Whether that tide is rising high enough or quick enough for immediate yachting opportunities in Cuba remains to be seen. We are already offering Charter Itineraries to Cuba, and as the infrastructure of the Island improves, and restrictions and pressures caused by the embargo ease, Cuba my shortly return to its former glory as a tourist Mecca for well-heeled Americans. When that day arrives, you can be sure that 26 North Yachts will be here to help you navigate the waters, figuratively and literally of yachting opportunities in Cuba.

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