Cuban hotel companies and ground handlers have requested a change in contracts with tour operators to allow them to bill prices in US dollars, but continue to receive payment in Euros or British Pounds, as the case may be. Previously the contracts were quoted in Euros and/or British Pounds. This will come into effect as from 1 July 2015.
Tour operators have raised serious concerns with these contract changes, including:
– Hotels and ground handlers are not using a common exchange rate – exchange rates are random
– Prices for packages have already been included in the brochures for the summer 2015 and winter season 2015-16 and cannot be changed
– The cost of currency conversions cannot be passed on to the consumer, drastically reducing the slim margins of tour operators
– From a technical point of view, tour operator software cannot deal with costs quoted in one currency and payment in another currency. This means manual handling of these operations and thus additional cost.
According to first estimates, the increase in hotel rates announced for this year and the additional currency conversion costs resulting from these contract changes could increase the price of packages of up to 40%. There is a risk that tour operators will stop selling Cuba and that air transport capacity will be reduced.
There is clearly an intention from the Cuban government to better exploit the US source market at the detriment of existing source markets, such as Canada (representing 48% of international tourist arrivals), followed by Germany (4.6%), France (4%), UK (3.8%), Italy (3.4%), Spain, Netherlands, Switzerland, Poland, Austria, etc.
Both ECTAA and The Nationa Travel Agencies Associations in Germany (DRV) and the UK (ABTA), have decided to write to the Cuban government asking for a postponement of this action.
