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Monday, November 30, 2009

The Real Costs of Cuba Travel

As we all return from our Thanksgiving holiday, the Christmas travel season begins and with it the harsh realities of current travel issues facing all licensed travelers from the U.S. to Cuba.
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While we can debate the significance of Cuba’s recent war games, “Cuba Begins War Games with U.S. Invasion in Mind” http://www.reuters.com/article/latestCrisis/idUS12593125118 or what is on the minds of the Cuban people right now, “Cubans Fear Hard Times Ahead, Impatient for Change” http://www.reuters.com/article/globalNews/idUSTRE5AQ2XT20091127?sp=true ,
the reality here is that the high travel season to Cuba starts now and with it the array of exorbitant costs faced by travelers due in part to the perversion of market forces that the travel ban and lack of normal relations create and Congress and the Administration continue to ignore.
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The charter companies themselves have to deal with all sorts of special fees and taxes paid to both the U.S and Cuban governments and airport authorities. And when you inquire why these charges are what they are, the reason given is the same – Lack of normal relations and travel restrictions make the process more expensive.
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The ultimate victim are the travelers themselves as they have to pay these fees and costs or they do not travel to Cuba. Who would ever believe traveling to Cuba from the U.S. can cost well over a thousand dollars when it is all said and done? Who is profiting from this self imposed misery?
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So what are the approximate costs to travel to Cuba for a Cuban American? On average they must:
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1) If You Are Cuban American - Obtain Two Passports – One U.S. ($100) the other Cuban. Cuban Americans have to travel with a Cuban passport in most cases. Cuba charges as much as USD$450($375 plus any travel agency fees) to obtain a Cuban Passport which must be authorized every two years, “habilitado” at an additional charge. A complete list of Cuban consular services and fees are located at
http://embacu.cubaminrex.cu/Default.aspx?tabid=14180
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These fees are quite high compared to other countries, but when asked for the rationale of these high fees, the answer is the same – lack of normal relations and travel restrictions and limited diplomatic personnel to staff interests sections and process consular matters all lend themselves to higher fees and longer wait times.
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[Note to President Obama and President Castro – can the U.S. and Cuba agree to send and hire more consular staff to each respective Interests Section to process visas and passports?]
Americans have to purchase a visa to visit Cuba. That cost is USD$70.00
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2) Pay exorbitant airfare and departure taxes - The lack of competition and burdensome regulations drive the costs of the charter airfare, which not only has to pay the leasing of airplane equipment and crew, but also pay landing fees and other airport related fees. Then on top of this, the charter company has to charge enough to pay its employees and benefits and make a profit.
Currently, approximate charter airfares are running at:
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Miami-Havana Roundtrip for $600 [ Who would believe this is what is being charged for a 45 minute fight ] I have heard from friends in Miami who are paying as high as $700!
New York-Havana Roundtrip for $900 [Who would believe this is what is being charged for a 3.5 hour flight]
Then there are airport departure taxes in the U.S. (usd $50) and Cuba (usd $30)
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3) Pay Excess Baggage fees – Each traveler is permitted 44 pounds of luggage total. Once you go over that you are charged up to usd$2.00 per pound. Why can’t this be normalized so that travelers are allowed up to two pieces of luggage at 50 pounds per piece without overage charges as is the practice on other airlines? The reason of course given– travel restrictions and the lack of normal relations.
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4) Pay Customs duties – Cuban Americans are charged customs duties based on the weight of their luggage and the goods they bring with them to Cuba. This can add significantly to the cost for the Cuban American traveler.
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5) Pay Foreign Exchange Tax – I recall when the U.S. dollar circulated as a parallel currency in Cuba during the first part of this decade. There was no ten percent surcharge or tax on exchange. Then the Bush Administration fined UBS Switzerland 100 million dollars in 2004 for exchanging dollars for the Cuban government. The Cuban government was effectively being isolated in the international banking system by our government. The result though was Cuba created its own foreign exchange system to insulate themselves financially from this kind of turmoil; departing from reliance on the dollar; and imposing a ten percent surcharge on all U.S. dollar exchanges to cover their risk on banking issues. So the Cuban American traveler and the American traveler all now face effectively a 20 percent exchange tax – 10 percent for the currency being used – the U.S. dollar and an additional 10 percent.
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[Note to President Obama – can you use your executive authority to stop penalizing foreign banks that engage in U.S. dollar transactions for Cuba? The impact of this could immediately create conditions to remove the 10 percent surcharge all U.S. travelers face.]
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This harsh reality for the Cuban American and American licensed travelers to Cuba is one that should be changed. The Congress failed to discuss this in the recent hearing in the Foreign Affairs Committee. Do the Congressmen even care about our own citizens? With the dysfunctional focus on human rights and travel, exactly how is this travel reality anyway connected to improving human rights in Cuba? There is no correlation of the high costs of current travel to Cuba with improving human rights there, only a select group of businesses and government authorities profiting on this absurdity. Our contribution to improving human rights in Cuba will be through our ending Cuba’s political and socioeconomic isolation from the United States. Congress has the power to bring down these costs by lifting the travel ban now.
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If you have information about other Cuba travel related costs or specific numbers, please do not hesitate to send them to us at info@uscuba.biz
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