American Hotel Investors for Cuban Economic Growth · American Hotel Investors for Cuban Economic Growth I. BACKGROUND Cubais acommunistcountryintheCaribbean,knownforitssugar,tobaccoandcoffee
Post on 23-Jul-2020
0 Views
Preview:
Transcript
American Hotel Investors for Cuban Economic Growth
I. BACKGROUND
Cuba is a communist country in the Caribbean, known for its sugar, tobacco and coffee
exports. In 1962, the U.S. extended an existing embargo on Cuba to ban all imports from Cuba
due to the Cuban refusal of democratization and general respect for human rights. This embargo,
including a ban on all imports, prohibited U.S. citizens from doing business in or with Cuba and
banned tourism.
While the embargo is still in effect today, during the Obama administration, the U.S.
eased certain restrictions. In 2009, President Obama eased the travel ban by allowing
Cuban-Americans to travel freely to Cuba and, in 2011, Obama further extended this to allow
students and missionaries to travel to the country under certain restrictions. As of 2015, the
Obama administration further reduced restrictions, to authorize U.S. citizens to travel to Cuba for
the following reasons: family visits, official business on behalf of the U.S. government,
journalistic activity, professional research and meetings, educational or religious activities,
public performances, clinics, workshops and athletic events, support for the Cuban people,
humanitarian projects, activities of private foundations, research or educational institutes,
exportation, importation, or transmission of information or informational materials and certain
authorized export transactions.
While “tourism” is not allowed, visitors have traveled to Cuba “in support for the Cuban
people” as a way to visit the country and spend foreign money to stimulate its economy. Despite
these restrictions, over 140,000 U.S. citizens traveled to Cuba in 2016, accounting for about 10%
SAMPLEDisclaimer: This document and the content on it has nothing to do with the brand. The content is the opinion of the author and was created as part of a class assignment
of Cuba’s tourism. The number of U.S. tourists to Cuba is estimated to grow this year, and the
government has announced that it is expecting 10 million visitors by 2030.
Although there is a rise in tourism and travel to Cuba, the hotel infrastructure is unable to
service the growing number of tourists annually due to several decades of neglect following the
U.S. embargo in 1962. In response, the Cuban government is now allowing hotels to invest in
Cuba contingent upon a partnership with a state-owned tourism company.
II. MISSION STATEMENT/BUSINESS GOAL
The Cuban government does not have an official mission statement, however for the purpose of
this SPM the mission of the Cuban government is considered:
To ensure economic growth and sustainability in Cuba by developing jobs
and infrastructure in support of the Cuban people.
III. STATEMENT OF OPPORTUNITY
Cuban tourism has grown over 16% in 2015 and is expected to rise from 3.5 million to 10
million visitors by 2030, but the country currently does not have the infrastructure to
accommodate them. This trend has created a demand for hotels and lodging in Cuba. While the
country offers Airbnb-style lodging with private citizens and accommodations at small
Cuban-owned hotels, there are few foreign-owned hotels that can service foreigners visiting
Cuba.
The hotel industry in Cuba will need to grow to accommodate for the increase in travel.
Growth in the hotel industry will facilitate the growing trend of tourism and travel to Cuba while
1
SAMPLE
creating jobs for thousands people and improving infrastructure, meeting the requirements of
“supporting the Cuban people”. The Cuban government is seeking hotel investors that are willing
to partner with Cuban-owned tourist companies and build new hotels and restore existing
properties.
IV. RESEARCH GOALS & METHODS
Prior to the launch of the campaign, research would largely need to be conducted to
understand the current economic environment in Cuba regarding tourism, in order to shape the
upcoming campaign and identify what will help attract US hotel investors. A mix of primary and
secondary research would need to be conducted to inform the following goals:
● Goal 1: To better understand the type of accommodations visitors would prefer to stay at
during their visits to Cuba
● Goal 2: To gauge the interest in U.S. hotels investing in Cuba
● Goal 3: To gauge the economic impact of tourism in the region (i.e. Caribbean countries)
A.Primary Research
● Focus Group - We will conduct focus groups by selecting random sets of individuals
with various demographics who have potential to travel to Cuba. Participants would
range from male and female millennials who are prone to travel to male and female top
level executives who would most likely travel for work. These participants will be asked
questions regarding their interests in Cuba and what type of accommodations they would
prefer while visiting. A sample question may be: “During a visit to Cuba, what
accommodations would you prefer? For example, a Bed and Breakfast provided by host
2
SAMPLE
country nationals or a brand-recognized hotel chain?” Based on participants responses,
patterns, trends and perceptions will be identified to grasp the group's overall perspective
on travelling to Cuba and expected or desired accommodations.
● Survey - Insights from the focus group would then allow us to develop a 10-15 question
survey focused on gathering more significant quantitative data regarding travelers’
desires to visit Cuba and the lodging they prefer. With the survey, questions would be
more specific and quantitative in nature, for example, asking participants to rank on a
scale of most desirable to least desirable, the type of accommodation they would prefer.
Some options could be: “Bed and Breakfast reserved through a Cuban agency,” “Bed and
Breakfast reserved through AirBnB,” “Hostel,” “Local Motel,” “Brand-recognized Motel
(i.e. Motel 6),” “Brand-recognized Luxery Hotel (i.e. Four Seasons).” Answers to the
survey questions would allow us to present specific desires of customers to the potential
investors, allowing them insights to make better investments.
● Interview - Interviews will be conducted to gauge the wants and needs of hotel investors
and when investing in developing countries, as well as potential partners to the investors.
We will interview specialists, such as managers of Cuban-owned tourism companies and
financial analysts in the travel and hotel industry. We would ask them questions
regarding their opinions on the potential for hotel investments in Cuba and what their
specific needs are when investing in new property.
● Social Media Monitoring - Lastly, we will turn to all major social media platforms such
as Facebook, Twitter and Instagram, to monitor the positive and negative comments that
are posted in regards to traveling to Cuba, Cuban infrastructure and accommodations. We
3
SAMPLE
will use this data to analyze and compare to the survey findings to better construct a
visitor-friendly campaign.
B. Secondary Research
According to the World Travel and Tourism Economic Impact Report of 2015, travel and
tourism contributions in the Caribbean are set to increase significantly between 2015 and 2025. It
contributed a total of $51.9 billion in 2014 and is projected to contribute up to $73.6 billion by
2025 to the overall Caribbean GDP. Employment within the travel and tourism sector accounted
for 2.2 million jobs in 2014 and is projected to account for 2.7 million by 2025. In 2014
investment in Travel and Tourism in the Caribbean contributed to $6.2 billion of total
investments and is projected to grow 3.5% to $9.1 billion by the end of 2025.
When broken down, leisure spending accounts for 90.6% of all spending, while 9.6% is
business spending. Additionally, 70.4% of spending is from foreigners, while 29.6% is domestic.
The Caribbean is ranked 12th in overall contribution to travel and tourism GDP meaning there is
room for growth within the industry. With the lifted U.S. embargo on Cuba, travel and tourism
organizations can begin expanding their portfolios and further investing in the Caribbean market.
There are currently only 63,000 hotel rooms available in Cuba which can not
accommodate the current boom of tourists to the country. As of December 2016, only one
American-owned hotel chain has bought and restored a current hotel property. Additionally,
AirBnB has seen record growth in Cuba in part because Cubans were allowed to host foreigners
in their homes during the communist dictatorship, and AirBnB allows a more reliable network to
accommodate those visitors in a manner Cubans are accustomed. Hosting travelers in-home is
not a foreign subject and matches up with Cuban customs of hospitality and small business
4
SAMPLE
development. Due to the ease of transition to AirBnB from current bed and breakfast websites,
AirBnB is currently the greatest contributor to improving the Cuban infrastructure and
travel-related economy.
V. SITUATION ANALYSIS (SWOTS)
Strengths:
Since the U.S. has dramatically lifted restrictions on the embargo, Cuba has opened its doors to
travelers and businesses from outside countries. Additionally, Cuba is attractive to American
tourists because it has a strong, hospitable culture and is known for its sugar cane and tobacco
production, and pristine beaches. Due to the increased travel trend and attraction to Cuba, the
hotel industry is growing and Cuban citizens are trying to invest in building up the infrastructure
to accommodate and capitalize on foreign visitors, and lower unemployment rates.
Weakness:
While the embargo restrictions have been lifted, ome concerns arise when noting that Cuba is
still a communist country and tourism is still technically not allowed unless visitors come for the
purpose of “supporting the Cuban people”. Additionally, the property infrastructure has severely
deteriorated and needs to be renovated to accommodate visitors.
Opportunities:
Opportunities include lifted travel restrictions allowing for travel to Cuba to boom and
investments in the Caribbean countries are increasing. The Caribbean is also seeing increased
employments rates as well as 3.5% growth in investments.
5
SAMPLE
Threats:
The biggest threat lies in the booming market for AirBnB. The shortage of adequate
accommodations in Cuban hotels has benefited AirBnB, a direct competitor to hotel chains that
might be interested in expanding into Cuba. Additionally, visitors may question the
infrastructure, quality of services, ethics of touring Cuba and their individual safety.
Strategic Implications
Current trends support growth of the tourism industry in Cuba since the embargo was
lifted, leaving an opportunity for large hotel investors to expand into the country. Investing will
provide jobs showing support to the Cuban people, which will contribute to better relations with
the government eventually leading to opportunities for pure tourism, long term, allowing
investors to say they contributed to the opportunity for tourism growth in Cuba and giving them
a foothold on the Cuban market.
VI. COMMUNICATIONS GOALS
● To attract U.S. hotel investors to Cuba to accommodate for the increased tourism trend
following the lifted travel ban
● To convince U.S. hotel investors to “support of the Cuban people” through the creation of
jobs in the hotel industry
● To garner support from Financial Analysts and Cuban-owned tourism companies for
foreign hotels to invest in properties.
6
SAMPLE
VII. OBJECTIVES
1. Within one month of the campaign launch, three large hotel investors will be aware of the
opportunity to invest in Cuban hotel properties.
2. Financial Advisors opinions on investing in Cuba will positively increase by 10% after
three months.
3. Six months after campaign launch, the top three hotel investors’ will be knowledgeable of
regulations required to invest in Cuba.
4. Six months after campaign launch, 10% of all Cuban-owned tourism companies will be
aware of partnership opportunities.
5. One year after campaign launch, the top three hotel investors will begin purchasing
Cuban properties
6. Post campaign, we will see a 15% increase in hotel investment for the fiscal year.
VIII. TARGET AUDIENCES
American Hotel Investors:
● The first step towards attracting more hotel investors for Cuba Tourism Board is
targeting and addressing the American hotel investors. Among the American hotels, we
will mainly target the large boutique hotels with international chains and headquartered
in the United States such as Marriott, Hyatt, Hilton, Carlson, etc. These international
boutique hotels will be interested in investing in Cuba because doing so will help the
corporations achieve its business goals. For example, Marriott is maintaining a
sustainable strategy to become the world’s favorite travel company. Through the “power
of travel,” Marriott aims to create jobs, supports local businesses and grow the local
7
SAMPLE
socioeconomic and infrastructure needs of the areas they are located, therefore by
investing in Cuban property they are “supporting the Cuban people” and meeting their
strategic goals.
State-Owned Tourism Company:
● In 2014, the Cuban Government passed the Foreign Investment Law (FIL) offering
foreign companies a number of opportunities to build and commercialize hotel
development in joint ventures with a Cuban partner. In other words, if an American
hotel wants to entre the Cuban market, it should be in conjunction with a Cuban state
partner. We will target these Cuban-owned tourism companies to develop a pool of
potential partners for the investors to work with.
Financial Analysts:
● We regard the financial analysts as the targeted influencers who can encourage the
American hotel investors to invest in Cuba. It is also one of the most effective ways to
communicate with active groups and inform the investors of the financial benefits of
investing in Cuba.
IX. KEY MESSAGES
Overarching message: “Cuba aims to continue its current unprecedented tourism boom and
boost foreign investment in the hotel sector, as part of making the island one of the most hospital
tourism destinations in the Caribbean.”
8
SAMPLE
● The message highlights the continued increase of U.S. visitors and the government's
confidence to develop the tourism industry. It also shows a welcome to the foreign
investors.
Message to American Hotel Investors: “Due to the tourism boom and the current ease on the
United States embargo on Cuba, increased interaction and business dealings with the Cuban
people and companies has important economic benefits. We welcome American investors.”
● This message points out the fact that hotel investing in Cuba could garner high financial
return for the American hotel investors. It also reinforces the positive attitude of the
Cuban Government.
Message to State-Owned Tourism Company: “Since American tourists and companies are
investing to support the Cuban people, partnering with the American hotel investors could have
high financial benefits and perpetuate the exchange of ideas and knowledge to offer greater
success for the Cuban people.”
● This message is to explain the situation and benefits of partnering with hotels investors
to the state-owned tourism organizations.
Message to Financial Analysts: “The tourist boom in Cuba is boosting hotel business, creating
an opportunity in the Cuban hotel industry. ”
● The message is to convince the financial influencers that investing in Cuba is a good
choice for the American companies.
9
SAMPLE
X. STRATEGIES & TACTICS
Strategy: Convince investors that Cuban Hotel Industry has high ROI and follows government
regulations of supporting the Cuban people
● Tactic: Develop Cuban Tourism Board as a point of contact for those interested in
investing.
● Tactic: Invite hotel investors to a “Potential Investor's’ Meeting” in Havana to showcase
potential properties and inform Hotel executives of the opportunities of investing in
Cuban properties
● Tactic: Create “Investor Kit” with all relevant information to investing in Cuba. Some
items may include:
○ Cuban Economic Growth Fact Sheet/Infographic
○ Investing in Cuba FAQ
○ Cultural background
○ Cost of investing vs. potential profit fact sheet
○ Map and descriptions of potential properties for investment
Strategy: Create a digital media campaign to emphasize how investment will impact the CSR
strategies of the American hotels by supporting Cuban people and employees.
● Tactic: Own #InvestInCuba on Facebook, Twitter and Instagram
● Tactic: Develop short videos highlighting the Cuban people and how working with and
for international hotels has helped support them
○ Videos will be posted to Facebook and Instagram
10
SAMPLE
● Tactic: Develop photographic stories for Instagram highlighting “rags to riches” stories
of Cuban people
● Tactic: Showcase potential properties for investment on Twitter
● Tactic: Develop website for Cuban Tourism Board to host social media network posts
and expand upon the updates with blogs and long-form videos.
Strategy: Create partnerships with Cuban-owned tourism companies
● Tactic: Facilitate partnership meetings with Cuban-owned tourism companies to inform
them of Hotels interested in partnering with them to expand development and
investments
● Tactic: Develop information kit for Cuban-owned tourism companies to inform them of
partnership opportunities
● Tactic: Visit individual organizations to better match potential partnerships
Strategy: Convince financial analysts of growing trends in travel to Cuba
● Tactic: Contact financial analysts in the hotel and tourism industries and provide them
with statistics surrounding the potential for investment in Cuba
Strategy: Steer financial press coverage of the story toward a positive direction through proactive
media outreach.
● Tactic: Develop press releases announcing investor and partner meetings
○ Pitch stories to both Cuban and American media
● Tactic: Announce partnerships between Cuban-owned business and Hotel investors
● Tactic: Announce hotels who have committed to investing in Cuba in support of the
Cuban people.
11
SAMPLE
XI. EVALUATION
In order to measure the success of our communications campaign, we would employ the
following methods of evaluation:
● Investment monitoring – A comparative analysis would be done using the Cuban
Government’s financial statistics regarding to the hotel industry prior to and after the
implementation of our communications strategy to determine any apparent investment
patterns. A 15% increase in investment in a fiscal year will indicate the success of this
campaign.
● Pre and post hotel investors’ perception interviews – The results of our initial
interviews from the primary research will be compared with the findings from some new
interviews conducted at the end of campaign. A 20% increase in overall positive
perception of “supporting of the Cuban people” among the American hotel investors will
suggest a successful campaign.
● Online and social media monitoring – A 15% increase in the daily number of positive
engagement on social media with the hashtag #investincuba will mark this campaign as a
success.
● Media coverage massaging – A 10% increase in positive media coverage of investing
in Cuba by national and local media outlets will make this a successful campaign.
XII. TIMELINE
The campaign will run from May 2017 to December 2018 to develop Cuban Tourism Board, to
develop partnerships with Cuban-owned companies and attract U.S. hotel investors
12
SAMPLE
● May 2017:
○ Develop Cuban Tourism Board
○ Begin research phase (surveys, focus groups, interviews, etc.)
● June 2017:
○ Develop information kit for Cuban-owned tourism companies to inform them of
partnership opportunities
○ Create investor media kit materials and begin coordinating Potential Investors’
Meeting
○ Create informational materials for financial analysts based off trends and research
results
● July 2017- Ongoing:
○ Begin coordinating partnership meetings with Cuban-owned businesses and
securing potential partnerships
○ Coordinate potential investors’ meetings with U.S. investors and meetings with
financial analysts
● December 2018 - Ongoing:
○ Announce partnerships between U.S. and Cuban hotel businesses and Summer
2018 development plans
○ Launch digital campaign on social media sites (Facebook, Instagram, Twitter)
13
SAMPLE
XIII. BUDGET
Tactic Estimated Cost Description
Cuban Tourism
Board $3,000
(Above average yearly income = $1,000/year x 3
employees responsible for managing investor relations
and content creation)
Investors Meeting $2,250
Flight from LAX to Havannah = $375x 6 hotel
representatives (2 per 3 hotels)
$8,748
Hotel accommodations for best rated hotel in Havana =
$486/night x 3 nights x 6 people
Investor Kit $10 10 Custom USB drives with Investor Kit
Digital Media
Campaign $300
for sponsored posts on Facebook, Twitter and
Video $100
Above average monthly wage for freelance Cuban
video-maker
Estimated Total
Cost: $14,408
14
SAMPLE
XIV. SAMPLE TACTICS
15
SAMPLE
= Available Locations #InvestInCuba
16
SAMPLE
XV. SOURCES
http://traveltips.usatoday.com/effects-tourism-caribbean-63368.html
https://www.wttc.org/-/media/files/reports/economic%20impact%20research/regional%202015/c
aribbean2015.pdf
http://abcnews.go.com/Travel/story?id=118859&page=1
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.330.6563&rep=rep1&type=pdf
http://www.caribjournal.com/2013/09/30/tourism-and-the-caribbean-economy/#
http://www.pbs.org/newshour/bb/cuba-american-tourists-increase-demand-hotels/
https://www.forbes.com/sites/miguelhelft/2015/09/06/inside-airbnbs-cuba/#bdd87f6bc2d2
https://www.brookings.edu/research/tourism-in-cuba/
https://www.brookings.edu/wp-content/uploads/2016/11/fp_20161202_tourism_cuba_feinberg_n
ewfarmer.pdf
17
SAMPLE
top related