Trump to restrict Cuba travel, restrict business deals

On June 16, President Donald Trump announced plans that his administration will be changing President Barack Obama’s Cuba policy.

Trump described Obama’s policy as a “completely one-sided deal with Cuba.”

Embassies in both countries will remain open. Direct commercial flights and cruises from the United States will still operate. However, under Trump’s new policy, individual travel to Cuba will be more restricted. The Washington Post described Obama’s individual travel policy to Cuba as an honor system. Travelers self-declared their travel category without policed compliance. According to Trump’s presidential memorandum, the 12 categories of authorized travel will be more stringently enforced and travel to Cuba will be regularly audited to ensure compliance.

Americans must travel through a licensed tour company under U.S. jurisdiction and be accompanied by a company representative. Cuban Americans and others who fit the more narrow categories will still be allowed to travel on their own.

And American individuals who wish to do business with Cuba will face restrictions on how and where they can spend U.S. dollars in Cuba.

Trump’s new policy restricts U.S. companies from partnering with firms tied to the Armed Forces Business Enterprises Group. The Presidential Memorandum directs that, within 30 days, the Secretary of the Treasury and the Secretary of Commerce “shall initiate a process to adjust current regulations regarding transactions with Cuba.”

The Washington Post reported the prohibition on individual travel will hurt U.S. commercial airlines and cruise companies. U.S. businesses to enter the Cuban market will suffer due to the new restrictions on financial transactions with military-run or affiliated entities, which are reported to control 40 to 60 percent of foreign exchange earnings.

The military’s Gaviota Tourism Group, for example, controls or has joint ventures with foreign partners in 64 hotels and villas, reported the Miami Herald.

Some of the U.S. companies have inked deals with military entities. Starwood Hotels and Resorts was the first company to manage Cuban hotels in decades. In March 2016, Starwood Hotels and Resorts announced that it had signed three hotel deals in Cuba.

Starwood received authorization from the U.S. Treasury Department to operate existing hotels in Cuba. The Hotel Inglaterra in Havana joined Starwood’s Luxury Collection brand. The Hotel Quinta Avenida, also in Havana, is now a Four Points by Sheraton. And the Hotel Santa Isabel in Havana was converted into a Luxury Collection property.

The Real Deal stated Trump’s stance will make U.S. real estate deals in Cuba impossible and deals like Starwood Hotels won’t happen in the future.