If travel to Cuba is eased, it won’t just be a Millennial thing
On April 2nd, 2015, rental-by-owner leader Airbnb announced an amazing breakthrough; it is expanding into Cuba with an initial roster of a thousand properties.
Had they announced a day earlier, most of us would have assumed it was an April Fool’s Day prank against the long-standing U.S. ban on trade with, and travel to, the island.
Imposed by President Kennedy over fifty years ago, despite later modifications, the embargo still bars everyday Americans from visiting Cuba. Travel is only allowed for certain family, cultural, government, humanitarian and professional purposes.
However, polls show the bans may be out of step with public opinion. In February, Gallup found Americans who favor ending them outnumber opponents by two-to-one.
With both President Obama and a recently introduced bipartisan U.S. Senate bill proposing the relaxation of restrictions, the outlook for the travel industry is bullish.
Under the current rules, some 400,000 Americans visit Cuba per year. A recent BloombergView article cited an estimate that, if the restrictions are eased, the number could jump to a million.
One big question for tourism marketers looking to climb on the Cuba bandwagon is which generation will be first to visit if the embargo is relaxed?
Travel to Cuba: 7 reasons why Boomers are very important
Conventional wisdom is betting on the Millennials for the usual reasons: cool, adventurous and open-minded. True, Cuba offers terrific value – crucial for young adults burdened with college loans and earning starter incomes.
So don’t write off the comfort-oriented Boomers too quickly. Here are seven big dynamics make the 50+ demo very, important to Cuba travel.
1. The huge scale of international travel – both overseas and cross-border …
- 62 million Americans traveled internationally in 2013
- 33 million visited our next door neighbors Mexico (21 m.) and Canada (12 m.)
- 29 million went “overseas” – 83%, or around 24 million, for leisure/personal trips.
2. Demographics … The average age of American overseas leisure travelers in 2013 was 45; the median household income was $93,000. That just screams affluent Boomer clout.
3. $40-50 Billion … Of the $100 Billion spent in 2013 by Americans on overseas personal and business travel, we project 40-50% was accounted for by leisure tourists aged 50+. The overseas definition does not include cross-border trips to Mexico or Canada: our estimates would add another $7 Billion for Boomer personal travel.
4. The Caribbean region is already America’s #2 overseas destination … At 7.2 million visitors in 2013, it accounted for 30% of American overseas travelers.
Beyond market size, there are compelling human dynamics:
5. Most Boomers favor ending the Cuba embargo … According to The Pew Research Center, only about one-in-three Americans over age 50 oppose doing so.
6. Boomer travelers are open to new experiences … Our sense of adventure built the modern travel industry, and we’re not done yet: the top Boomer reason for 2015 international travel is to visit a bucket list destination (32%) – HT: Statista.
And after 50 years of isolation, Cuba has a forbidden allure. Anyone who ever sipped a surreptitious Havana Club Mojito at Harry’s Bar on the Rue Daunou knows what we mean.
7. Canada shows the way … Canadians are not barred from visiting Cuba – 1.08 million did so in 2012. It was their #2 overseas destination after Mexico (1.6 m.) and a favorite for tourists of all ages (data: Government of Canada).
In fact, Canada accounts for over one-third of all Cuba visitors – a total of 3 million last year according to the Caribbean Tourism Organization.
A 2002 study by The Brattle Group estimated total U.S. travel to Cuba could reach 3 million annually if the embargo were lifted. If Americans follow the Canadian model, that would mean the Bloomberg figure of one million tourists could be achieved by Boomers alone. We would not be surprised.
Mainstream advertisers should end their embargo of 50+ Americans
With Americans aged 50+ spending $47 Billion on international leisure travel, the tourism industry takes the Boomer-Plus Generation™, born 1940-1965, seriously.
Travel executives already court our business and do not shy away from including older Americans in advertising and marketing materials. Smart. We control over 70% of U.S. household net worth and, if our 93 million consumers were a country, it would have the world’s 3rd largest GDP.
Sadly, mainstream Madison Avenue, stuck in 1960s thinking, embargoes contact with Americans over 50. The official line is that we no longer adapt.
Memo to Millennial disruptives: come visit Boomer-world, we have a lot to offer.