US changes on Cuba policy may impact duty free and travel retail industry

 

 Michael Payne, president and CEO of IAADFS
 
US President Donald Trump’s decision to reverse Cuba policies put into place by former President Barack Obama may impact duty free and travel retail industry operations in that Caribbean island nation by cutting back on the number of Americans able to travel there. 
 
Michael Payne, President and CEO of the International Association of Airport Duty Free Stores  (IAADFS), said Trump’s decision to restrict US citizens’ access to independent travel to Cuba could have negative consequences. 
 
“If there is going to be a reduction in the number of individual travel opportunities, it will have some impact,” Payne told Americas Duty Free & Travel Retailing in a telephone interview Monday. “It has implications for Americans trying to make their own travel plans for Cuba.”
 
Under the new policy, announced June 16, Americans will no longer be able to arrange their own private travel to Cuba, although they will be permitted to visit if they are part of US government-authorized educational tours. Nor will US companies or individuals be allowed to engage in business with any firm in Cuba controlled by the Cuban military.
 
But as Payne points out, it is still very early in the game and hard to predict the exact impact of these changes on the duty free and travel retail industry. 
 
“Nothing has changed yet,” Payne said. “All of the announcements (of changes) will have to have some rules. There has to be some regulatory scheme developed to implement the new restrictions and my assumption and understanding is that this will take a few months.”
 
But what Payne said he found “more interesting” is what Trump didn’t do. “He didn’t severe diplomatic relations and (he) did not stop travel from authorized tourism entities so people who have been approved for education trips can still travels.”
 
Nor did Trump place further restrictions on the types of goods that Americans can bring out of Cuba, like the country’s long-popular rum and cigars. 
 
And Payne pointed out that the changes only impact US citizens and US businesses, meaning that the restrictions on travel and commercial dealings do not directly impact businesses or people from other countries who may have dealings with Cuba. 
 
Some IAADFS member corporations are engaged in business with Cuba, of course, like Panama-based Motta International, which earlier shared with Americas Duty & Travel Retailing its plans to open a duty free store at Jose Marti International Airport in Havana and three other smaller airports later this year. 
 
The US Chamber of Commerce slammed the Trump decision in a statement that said the move is detrimental to all and said “the moves actually limit the possibility for positive change on the island and risk ceding growth opportunities to other countries.”
 
Also lambasting the decision was Marriott International, Inc., which has more than 5,700 properties around the world and recently opened a hotel in Havana. In a statement, Marriott CEO Arne Sorenson said it would be "exceedingly disappointing" to reverse the progress made in US-Cuban relations in the last two years. 
 
In the meantime, IAADFS’s Payne indicated that he is in a wait-and-see mode about the impact of Trump’s announcements on Cuba.  “Until you see the specifics in writing exactly what you can’t do, you really won’t know the impact.”