Carnival Corp. (NYSE: CCL) has announced what many tourists have hoped would come about for years. It will now be able to take you and thousands of other tourists to Cuba. Or will it? Carnival’s announcement said that it has been granted U.S. licenses to operate direct cruises from the United States to Cuba. This is one of those announcements that sounds significant on the surface, but one in which is there is far more (or far less) than meets the eye.
The company noted that this travel approval was for the purpose of providing cultural exchange. It seems as though the company still has to be very muted about the opening up of Cuba in its scope under existing U.S. rules and restrictions, but you can imagine that travel demand is likely to be through the roof. Supply is another matter.
Carnival said that Fathom, its new purpose-travel brand, will begin full-week sailings to Cuba. That is the good news. The bad news: these cruises will not begin until May of 2016, and it is a 710-passenger boat.
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Carnival’s newly launched Fathom brand was described as follows:
A new social impact travel brand providing purpose-oriented, social impact experiences, initially in the Dominican Republic. … The brand expects to attract 37,000 annual travelers who collectively could spend a total of more than 100,000 days a year either volunteering or immersing in educational and cultural exchanges in local communities.
Beginning in April 2016, fathom will embark on weekly seven-day voyages from Port Miami aboard the MV Adonia, a 710-passenger vessel redeployed from Carnival Corporation’s P&O Cruises (UK) brand. fathom’s first impact destination will be the northern region of the Dominican Republic, where Carnival Corporation’s new port of call, Amber Cove, will serve as home base.
Carnival said:
Authorized under current U.S.-to-Cuba travel guidelines, the new Cuban itineraries on fathom will strictly comply with U.S. Department of Treasury rules that allow licensed travel companies to transport approved travelers to Cuba to engage in activities that support the Cuban people. Carnival Corporation is in active discussions and plans to work with the appropriate authorities in Cuba so that Cuban approval is granted.
With just a mere 710 passengers per trip, it is hard to expect that Carnival is opening up a floodgate of new travel demand. And many restrictions still remain under existing travel rules. Carnival’s 100 ships come with a total of 212,000 lower berths, and revenue was $15.88 billion in 2014. Carnival also showed in its 2014 annual report that its multiple brands carried a total of 10.6 million passengers in 2014.
This may be significant in the symbolic sense of opening up Cuba. Unfortunately, it is unlikely move the needle financially — yet.
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