## Vacation Over: Implications for the Caribbean of Opening U.S.-Cuba Tourism

_IMF Working Papers, July 1, 2008_

## Source details

**Canonical URL:** [Vacation Over: Implications for the Caribbean of Opening U.S.-Cuba Tourism](https://www.imf.org/en/publications/wp/issues/2016/12/31/vacation-over-implications-for-the-caribbean-of-opening-u-s-21887)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/vacation-over-implications-for-the-caribbean-of-opening-u-s-21887/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/vacation-over-implications-for-the-caribbean-of-opening-u-s-21887/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/31/vacation-over-implications-for-the-caribbean-of-opening-u-s-21887/bundle-manifest.json)

## Bibliographic details
- Authors: Rafael Romeu
- Published: July 1, 2008
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451870206.001

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### Summary
- An opening of Cuba to U.S. tourism would represent a seismic shift in the Caribbean's tourism industry.
- The 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.

### Major findings
- A hypothetical liberalization of Cuba-U.S. tourism would increase long-term regional arrivals.
- Neighboring destinations would lose implicit protection afforded by the current U.S.-Cuba tourism restriction.
- Cuba would gain market share following liberalization.
- Short-run effects would be partially offset by redistribution of non-U.S. tourists currently in Cuba.
- Caribbean countries remain generally dependent on U.S. tourists and are therefore vulnerable to changes in U.S.-Cuba tourism policy.

### Methodology and controls
- The study estimates a counterfactual capturing the bilateral restriction on tourism between the United States and Cuba.
- Controls used in the analysis include natural disasters, trade agreements, and other factors.

### Policy implications and considerations
- Destinations in the Caribbean should assess their dependence on U.S. tourists given the potential for increased competition from Cuba after liberalization.
- Policymakers may need to consider diversification strategies for tourism markets to reduce vulnerability to changes in U.S.-Cuba travel policy.
- Short-run redistribution effects imply transition considerations for countries currently receiving non-U.S. tourists redistributed by Cuba.

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## Content in this bundle

- **_wp08162 — Descriptive Statistics of Caribbean Tourism**
  - [_wp08162 — Descriptive Statistics of Caribbean Tourism (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2008/_wp08162.pdf.md){rel="alternate" type="text/markdown"}
  - [_wp08162 — Descriptive Statistics of Caribbean Tourism (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2008/_wp08162.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/vacation-over-implications-for-the-caribbean-of-opening-u-s-21887_