Vacation Over: Implications for the Caribbean of Opening U.S.-Cuba Tourism
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Summary:
An opening of Cuba to U.S. tourism would represent a seismic shift in the Caribbean's tourism industry. This study models the impact of such a potential opening by estimating a counterfactual that captures the current bilateral restriction on tourism between the two countries. After controlling for natural disasters, trade agreements, and other factors, the results show that a hypothetical liberalization of Cuba-U.S. tourism would increase long-term regional arrivals. Neighboring destinations would lose the implicit protection the current restriction affords them, and Cuba would gain market share, but this would be partially offset in the short-run by the redistribution of non-U.S. tourists currently in Cuba. The results also suggest that Caribbean countries have in general not lowered their dependency on U.S. tourists, leaving them vulnerable to this potential change.
Series:
Working Paper No. 2008/162
Subject:
Gravity models Natural disasters Tourism Trade agreements Trade liberalization
English
Publication Date:
July 1, 2008
ISBN/ISSN:
9781451870206/1018-5941
Stock No:
WPIEA2008162
Pages:
62
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