Summary

It's not a matter of if any longer, but only when Cuba is opened up to accept and embrace the U.S. Cruise Industry.  There are few  barriers to entry and from a strategic perspective, cruise lines have already modeled itineraries and know the tonnage that would be positioned to leverage this new destination.

Analysis

The opening of Cuba will provide the three major cruise lines, Carnival Corp, Royal Caribbean and NCL with a new and potentially signifcant lift in Caribbean sales.  Given the natural demand from such an event, participates will benefit from the following:
 
  • Significantly higher APD's for Cuba than traditional Carribbean trades
  • Increased on board revenue from significant demand for shore ex
  • Most importantly, a lift in the flat line growth of the Caribbean market by adding a compellilng and demanded new set of ports
  • Opens up all segements, most importantly the 3,4 & 5 day markets should see significant lift in tonage and APD's.  These markets could benefit even more than the traditional 7-day cruise because of the short distance to Cuba.
  • Cuba will provide the major and minor players with a breath of fresh air when it comes to itinerary planning.  The "been there, done that" will no longer apply to the Caribbean trades.
  • Downside is lack of port infrastructure, but given the nature of the modern cruise ship,  this should not be a significant barrier to entry
  • All in all, Cuba should be a cash cow for the next 20 years.

This author consults with leading institutions through GLG

Engage this author or other Consumer Goods & Services experts
 
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.