Why Carnival's first cruise to Cuba could be delayed

The cruise operator will let Cuban-Americans book on its cruise, but says it won't sail until Cuba changes a law banning natives from returning home by sea.

Carl Juste/The Miami Herald via AP
Victor Garcia, 38, of Miami, from left, Maria Hernandez, 61, of Kendall, and Miriam Dominguez, 81, protest against Carnival Corporation as they hold a rally in Doral, Fla., last week. Some Cuban Americans had complained that Carnival was unfairly excluding them from sailing with the company when the cruise line heads to Cuba for the first time in decades.

The world's largest cruise ship operator, Carnival Corp., now says it will delay the departure of its May 1 inaugural cruise to Cuba until the island nation lifts a ban on Cuban nationals returning by sea.

Carnival, which is optimistic the Cuban government will change its policy, is one of a growing number of US businesses putting pressure on Cuban regulators to open markets on their terms, especially in the tourism and hospitality sectors. 

Carnival, which had previously disallowed Cuban-Americans from booking on its cruise due to the Cuban law, has changed course: it is now allowing bookings from all potential passengers and says its scheduled May 1 cruise will be delayed if the Cuban government does not change its law. Cuban Americans can currently only return from America by plane.

Carnival's Fathom line has plans to operate the 704-passenger Adonia every second week from Miami to three ports in Cuba: Havana, Cienfuegos, and Santiago de Cuba.

"We remain confident that we will reach a positive outcome and we continue to work full speed ahead in preparing for our every-other-week sailings from PortMiami to Cuba," Carnival CEO Arnold Donald said in a statement.

In a memo to employees obtained by MarketWatch, he added: "As we continue our discussions with Cuba, and in anticipation of Fathom travelers being on equal footing with those who travel by air, we are accepting bookings from all travelers, including Cuba-born individuals. However, if Cuba's decision is delayed beyond May 1, we will delay the start of our sailings."

The announcement comes after a turbulent week for the company, which included protests, political pressure, and two Cuban Americans who tried to book on the cruise filing a civil-rights lawsuit in the Miami federal court.

Carnival had previously said it was in ongoing talks with the Cuban government to change its policy, but people like Francisco Marty – who filed the lawsuit along with Amparo Sanchez – said those measures were not enough, CNN reported.

While the US embargo on Cuba has been cited as a major impediment to more free investment by US and other international companies in Cuba, what many see as draconian Cuban regulations on investment have also come into focus.

On the heels of President Obama's visit to Cuba last month, large hotel operators including Marriott and Starwood Hotels & Resorts Worldwide headlined groups who have recently gained the right to begin investing in and running hotels on the island.

"If you want to operate a hotel, one of the biggest problems if you manage a hotel is around the hiring of staff," Stephan Meier, an associate professor at Columbia School of Business who just returned from a one-week visit to Cuba, told The Christian Science Monitor.

However, Cuban government rules say companies can't hire their own staff based on merit. Instead, they require them to choose from one or two pre-selected candidates whom they are not allowed to fire if they underperform. Incentivizing performance with pay is also not allowed.

"To some extent, it would be presumptuous of us, for a single company, to come down and say, 'We must make demands that you change your approach,'" Marriott CEO Arne Sorenson commented to USA Today. "But I do think we can have conversations with them and say, 'Let's explore how we can evolve this process to make sure these great jobs get created.'"

Still, the momentum of US investment seems inevitable, with Mr. Obama announcing that Google would likely make its first foray into Cuba.

The Carnival saga also prompted a rare showing of bipartisan cooperation, with both Democrats and Republicans saying the company should not sail until Cuba lifted its ban, the Miami Herald reported.

"Carnival should not sail to Cuba until the ban on Cuban-born passengers is lifted," Democratic Rep. Alan Grayson of Orlando told the Herald. "I would not forbid Carnival to sail through public action, but I would heavily discourage it and try to persuade Carnival not to sail to Cuba until the policy is changed."

If the cruise goes ahead, it will be the first in 50 years to travel from the US to Cuba.

Tickets for the cruise begin at $1,800 per person, not including extra costs such as Cuba visas.

This report includes material from the Associated Press. 

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