After 55 years of frostiness, a sudden warming in relations between the United States and Cuba has directed attention towards the Cuban tourism industry. The Communist island saw an 18% increase in visitors to 2.62 million in the first nine months of 2015. Canadians lead the pack, followed by Germans and Britons.
Cuba’s Tourism Minister has pledged to build 13,600 additional hotel rooms, attracting the attention of global hotel operators.
However, opportunities in this largely untapped market do not come without risks. Cuban infrastructure will take decades to bring up to international standards and bureaucracy remains a huge hurdle. Foreign companies, for example, must partner with a Cuban entity to do business.
The Cuban real estate market is also tightly controlled by the government and except for a small number of condos, foreign ownership of property is still not permitted. Although Cuban nationals can now buy and sell property for the first time since the 1960s, it is expected to be quite some time until a second homes market for overseas buyers develops.
This article was originally published in Issue 6 of The Caribbean Property Investor magazine. To read the full issue, click here.