Carnival Corp. is steering a course toward Cuba.
The world’s largest cruise ship company announced Tuesday that it had received approval from the U.S. government to operate cruises to the island nation as a provider of cultural exchange programs.
Plans call for the Doral-based company’s “social impact travel” brand, the recently announced fathom, to start operating week-long Cuban itineraries in May 2016 using the 710-passenger vessel that now sails as P&O Cruises’ Adonia in the United Kingdom. Fathom will launch in April, initially with trips to the Dominican Republic built around volunteering activities.
“These licenses today are historic,” said Arnold Donald, president and CEO of Carnival Corp. during a conference call with media Tuesday. “This will be the first time in well over 50 years that a cruise ship can take passengers from the United States to Cuba and return in any kind of repeated basis.”
Still pending: approval from Cuban authorities, a survey of infrastructure at ports where the ship might call and details about itineraries or on-the-ground activities. Because travel for the purpose of tourism is still off-limits for Americans, lounging at the beach will not be allowed.
The company hopes to visit three different locations within a week-long trip, one of which will almost certainly be Havana.
“We believe there’s a tremendous pent-up hunger in the marketplace and so we’re excited to see and share as much of the country as is possible,” said Tara Russell, president of fathom and head of global impact for Carnival Corp.
Vicky Garcia, chief operating officer and co-owner of travel agent network Cruise Planners, said she hears of interest in travel to Cuba “on a daily basis.”
“A lot of clients are asking their Cruise Planners agents: ‘How can I go to Cuba before it opens up?’,” she said. “They want that truly immersive, before-it-becomes-too-touristy viewpoint. People want to get in.”
Donald said Carnival Corp. has long studied Cuba as a potential destination, but became encouraged about the possibility after President Obama announced plans to thaw a decades-long diplomatic freeze in December. The company applied for licenses a few months ago and got word that approval was granted on Thursday, he said.
Carnival has been in contact with the Cuban government for the past month about its efforts to gain licensing approval from the U.S.; Donald described conversations as “very cooperative.” He said the company hopes to participate with authorities in Cuba on port development.
Although news of fathom — which is focused on “voluntourism” activities with partners on the ground — only became public last month, Donald said executives kept the idea of Cuba “in the back of our minds” as they cooked up the concept of the brand over the last couple of years.
As part of normalizing of relations, the U.S. Department of the Treasury said earlier this year that citizens who fall under 12 categories of authorized travel — which includes educational activities, humanitarian projects or people-to-people programs — didn’t need to apply for a specific license or get prior approval to go to Cuba.
Donald said the possibility always stood out that a brand dedicated to social impact might qualify under those criteria for authorized travel.
Passengers from the United States will still have to certify that they are traveling under one of the allowed categories, and they will pay a premium for the experience. Prices for seven-day cruises to Cuba will start at $2,990 per person, which includes meals on the ship and some cultural immersion activities on land. The fare does not include taxes or fees, and traditional tour excursions or unstructured time off the ship will not be available.
That price point is nearly twice as much as fathom voyages to the Dominican Republic and four times as expensive as the cost of a balcony stateroom during a week-long Carnival Cruise Line sailing in the Caribbean.
Donald said the costs associated with sailing in Cuba are not yet clear, but he believes the fathom pricing fits into the current range of options.
“Fundamentally, if you look at the competitive landscape in Cuba of pricing and these experiences, you’ll see that we’re well within that range,” he said. “There are many that would be more costly than the number we’re quoting.”
Starting in May, the brand intends to alternate each week between culture-heavy itineraries in Cuba and volunteer-focused voyages to the Puerto Plata region of the Dominican Republic. At some point, the Cuba trips are also expected to include an optional volunteer component.
Reservations opened for potential Cuba trips on Tuesday; deposits are fully refundable.
Brad Tolkin, co-chairman and CEO of cruise distributor World Travel Holdings, said he wondered when he first heard about fathom whether the brand could fill the ship for weekly trips to the Dominican Republic at a $1,540-per-person price point.
He called the plan to add Cuba sailings “brilliant.”
For those who want to visit the island under current restrictions, he said the cruise option will allow travelers to avoid the hassle of booking a charter flight and finding a place to stay.
“The price point, while steep, it won’t be a hurdle,” Tolkin said. “Like people buying the Apple Watch: There’s going to be people who just do it.”
Miami-based cruise expert Stewart Chiron, CEO of CruiseGuy.com, said the option is likely to appeal to those who want to combine the familiarity of a cruise with the appeal of a relatively undiscovered destination.
“Having the safety, security and comfort of a cruise ship is going to make the difference for a lot of people,” he said.
In the world of Cuba travel, Tuesday’s announcement was “certainly the buzz,” said Collin Laverty, owner of Cuba Educational Travel in Washington, D.C.
Laverty, who was in Cuba Tuesday, said in an email that an increased cruise presence will help make up for a lack of hotel rooms and airport infrastructure, but questioned whether cruise travel would be beneficial to the island as it continues to evolve as a tourist destination.
“It represents a great leap forward in terms of the U.S. government restoring the rights of Americans to travel freely,” he wrote, “while at the same time posing a significant challenge to Cuba and its approach to trade, travel and investment going forward, and how cruise ships fit into the country’s development strategy.”
While Donald said the company’s initial push will be centered on fathom, the efforts will set the stage for an eventual presence of Carnival’s other lines once the embargo is lifted. The company owns Carnival Cruise Line, Princess Cruises, Holland America Line, Seabourn, Costa Cruises and several other global brands.
“It’ll let us learn a lot and hopefully with the Cuban authorities’ support, allow us to help develop things not just for ourselves but for the industry overall,” Donald said.
Authorized tour operators such as Group IST and International Expeditions offer trips around Cuba on a sail cruiser, and Canada-based Cuba Cruise opened bookings to Americans on its cruise ship in January. European operator MSC Cruises announced just last week that it will base a 2,680-passenger ship in Havana this winter. Leaders of Miami-based cruise companies such as Norwegian Cruise Line and Royal Caribbean International have also expressed interest in adding Cuba to their itineraries.
Michael Bayley, president and CEO of Royal Caribbean International, said Tuesday that he has no comment on Carnival’s announcement but was sure his company would “start talking about various elements associated with this in the not-too-distant future.”
In a statement, a Norwegian Cruise Line Holdings spokesman said the Miami-based company is prepared with Caribbean itineraries featuring Cuban ports whenever leisure travel is allowed.
“Today’s announcement by Carnival is another step in the right direction to an overall easing of leisure travel restrictions on Cuba,” Frank Del Rio, president and CEO of Norwegian Cruise Line Holdings, said in the statement. “Cruise ship travel to Cuba benefits the Cuban people, the American consumer and the global cruise industry. I extend my congratulations and best wishes to Carnival for pioneering this critical first step.”