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Cuba Readies for U.S. Tourists With Luxury Hotels (Update1)

By Jonathan J. Levin

March 26 (Bloomberg) -- Cuba’s hotels could manage a sudden influx of 1 million American tourists if the U.S. Congress [bn:PRSN=1] lifts its 47-year ban on travel to the Communist island, Tourism Minister Manuel Marrero said.

Additionally, the Caribbean nation is set to expand its capacity of about 50,000 rooms, with groundbreaking scheduled for at least nine hotels in 2010, Marrero said. About 200,000 rooms may be added in the “medium to long-term,” he said. Cuba is also seeking investment partners for 10 golf courses and luxury hotels aimed at Americans, according to a ministry official.

“I’m convinced that today, with the available capacity, we could be receiving the American tourists without any problem,” Marrero said in an interview yesterday in Cancun, Mexico where he was attending a conference of 40 American and Cuban tourist industry representatives.

The tourism industry meeting comes as the U.S. Congress considers a law that would lift the ban on travel to Cuba. Senator Byron Dorgan, one of 38 co-sponsors of the bill, said he has 60 votes lined up to win passage of the measure this summer. Similar legislation introduced in the House has 178 co-sponsors and needs 218 votes to pass if all 435 members vote.

“This is a 50 year-old failed policy,” Dorgan, a North Dakota Democrat, told the meeting yesterday in a phone call from Washington. “Punishing Americans by restricting their right to travel just makes no sense at all.”

‘New Era’

President Barack Obama said March 24 that he’s seeking a “new era” in relations with Cuba even as he denounced “deeply disturbing” human rights violations by its government. He did not say where he stands on lifting the travel ban.

Obama last year ended restrictions on Cuban-Americans traveling to Cuba and transferring money to relatives back home. The U.S. State Department has also held talks in Havana with Cuban officials about restoring mail service and cooperation on migration issues.

Tourism to Cuba increased 3.5 percent amid the global financial crisis to 2.4 million visitors last year, with 900,000 visitors from Canada leading the way, Jose Manuel Bisbe, commercial director for the Tourism Ministry, said in an interview this week in Havana.

Bisbe expects foreign arrivals to grow by a similar amount this year. If the U.S. travel ban is lifted, hotels won’t be overburdened because Americans will visit year-round and face capacity problems only during the winter high season when occupancy reaches 85 percent, he said.

‘Forbidden City’

“Havana has been the forbidden city for so long that it will be a boom destination even in the low season,” said Bisbe, who estimates Cuba will add another 10,000 hotel rooms in the next two or three years.

Daniel Garcia, who has sold tourists used books in Old Havana since 1994, said more Americans would be good for business.

“The gringos can’t help but spend their money,” Garcia, 43, said at his stand in front of the neo-classical building that housed the U.S. Embassy before Fidel Castro’s 1959 revolution. “They are the easiest tourists to sell to. They never ask for discounts.”

Marrero said the government can’t finance development of tourist infrastructure on its own so it’s scouting for foreign partners such as Majorca, Spain-based Sol Melia SA, which already manages 24 hotels on the Communist island.

“The Cubans have provided us with a fairly complete picture of their tourism product and future opportunities for U.S. businesses to work in this market,” Lisa Simon, president of the Lexington, Kentucky-based National Tour Association, said in an e-mailed statement. “We look forward to a follow up conference next year in Cuba, should the legislation pending in Congress be approved.”

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