Why Is Cuba So Expensive For Travelers?

I received an email from a prospective family inquiring about our Cuba program, particularly about the unexpectedly high costs. This was a surprise to me too when I was initially researching a Sustainable Summer Cuba program a few years ago so I thought I would share my response publicly.

Here is the relevant part of the initial email:

My son is interested in your Cuba trip although I do not understand why it is so expensive compared to other trips and overall. Especially when Cuba is so cheap. And as I understand it there will be a $650 charter flight charge on top of the fee for a short flight from Miami to Cuba?

My Response About Cuba Travel

Thanks for getting in touch. Let me see if I can address your questions about the costs associated with our program in Cuba. As I understand it, you are primarily inquiring about the price of the program relative to our other programs in Latin America; the price of the charter flight given its short length; and the price of the program given the perception that “Cuba is cheap.”

Cuba is the most expensive destination for travelers in Latin America

You are absolutely correct to point out that our program in Cuba is more expensive than our other programs in Latin America. This reflects the fact that Cuba is one of the most expensive destination for travelers in Latin America. (Comparing an entire country to other countries is not a particularly good comparison to make. The possible exception here would be the more industrialized countries Argentina and Chile, although comparing US State Department per diems for Havana with other capitals in Latin America supports this claim – Havana has a max of $316, more than Santiago, Chile and San Jose, Costa Rica, for example.) Even if it is not the absolute most expensive for travelers, Cuba is certainly much more expensive than most for price conscious travelers, which is a big surprise to people expecting a budget backpacker’s paradise.

Although the average Cuban lives on dollars a day, that cost of living does not translate into inexpensive services for travelers. Services — particularly food, accommodations, and transportation — are significantly more expensive in Cuba than elsewhere in Latin America. This is largely a function of the market circumstances (not nearly enough supply to meet the demand), the fact that the travel industry is almost entirely government run (price controls, bureaucratic delays for new construction and services), and geopolitics (which are at least partial causes of both of the aforementioned).

Cuba Charter Flights

The lack of commercial flights is another unfortunate consequence of geopolitics. The US and Cuba have recently (Jan 2016) announced terms that will allow commercial flights to begin operating between the two countries, but service is not expected to be available until Fall 2016. This means the only way to travel between the US and Cuba is via charter flight or through a third-party country (such as Mexico or Canada). It’s possible that charter flight prices will start to respond to the pending new supply of (likely less expensive) commercial flights and we could see summer charters offered for less than current rates, and I think it’s possible we’ll see charter prices closer to $400 return, however it’s always best to under-promise in my experience. So, we’re listing $650 as the estimated charter flight cost for family budgets.

Extremely High Demand For Cuban Travel Services

We can’t set the prices for any of these services, beyond basic negotiation tactics. However, there is so much demand right now for travel to Cuba that no provider is going to be willing to offer a discount on services when there is such limited supply. (For example, there is reportedly no available hotel rooms in central Havana until 2018 and our in-country travel partner in Cuba has stopped responding to inquiries for new partnerships.)

Prices in Comparison to Other People To People Cuba Travel Programs

I’ll also mention that our program is a People-to-People program. This is how most US citizens experience Cuba, since it is an educational exchange program legally permitted by the Treasury’s Office of Foreign Asset Controls (OFAC). OFAC requires that travelers on People-to-People programs “have a full-time schedule of educational exchange activities that will result in meaningful interaction between the travelers and individuals in Cuba.” I would encourage you to research other People-to-People programs, for both adults and student travel. You’ll find that our program is a pretty outstanding value in comparison. National Geographic offers a 9-day itinerary for $5995 that has quite a bit of overlap with our itinerary and uses the same hotel in Cienfuegos as we do. Putney Student Travel’s 14-day itinerary is $5990. There is no way to make a true apples comparison between our program and others, but I am quite confident that we offer superior value. More on this point below.

Independent Budget Travel in Cuba

Is it possible to travel to Cuba for less than our program costs? Of course. I’ve traveled there via Canada using Air China, while staying in local’s homes, using the public bus systems, exchanging US dollars for Canadian dollars (to take advantage of favorable exchange rates an avoid the substantial “conversion tax” the Cuban government imposes on US dollars), and doing as many free activities as possible while still maintaining the integrity of OFAC’s People-to-People requirements. That shakes out to about $700/week in costs not including airfare. (Legal disclaimer: I would not recommend this approach unless your travel is affiliated with an organization that offers People-to-People trips since it is technically a violation of OFAC regulation 515.565(b) to “self-directed” activities not part of an organization operating with a People-to-People general license, but it does serve as an effective example of travel costs that may be applicable for other legally permitted reasons). In Ecuador, that same trip would be about $200/week or less. As a further point of comparison, I’ve managed on about $350/week in Costa Rica – Central America’s most expensive country.

All three of these previous examples would fit the definition of budget travel. Our programs generally, but even more so in Cuba, do not contract budget services. In Cuba, we stay in three or four-star accommodations, use private transport, and eat most of our meals in establishments that primarily cater to travelers.

A Focus on Superior Value in Cuba Travel

If I thought we could offer a program in Cuba at a budget class of service that would a) be legal b) adhere to our high standards for health and risk management and c) achieve our educational priorities, I absolutely would, but the circumstances in Cuba don’t allow for that at present. This may change in the next few years, although Cuba is also changing very rapidly. The pace of economic, political, and cultural change taking place there currently is unmatched anywhere else on the planet.

I am troubled by the fact that the price of the program puts the experience of visiting Cuba now out of reach for many families, more so than our other Global Learning programs. As a not-for-profit program, we are doing everything we can to help deserving families access the program through our scholarship and tuition assistance initiatives.

We offer our programs at a standard course fee, which takes into consideration a 20% margin to cover the organization’s general and operating costs, including allocations to our scholarship and tuition assistance funds.

We also offer – no questions asked – a tuition assistance course fee, which only covers a student’s direct participation costs.

Finally, we have a scholarship fund to provide financial support to families that need assistance up to 85% of the program tuition. Not unlike a university or independent secondary school, we depend on a variety of sources to fund our programs, the most important of which is families that can afford to pay our full tuition. However, if your family would benefit from taking advantage of one of our financial assistance programs, that’s what they’re there for. You can learn more about these options here.

Please let me know if you have any other questions at this time. I’d be happy to speak over the phone at your convenience.

Conclusion

So, that concluded my email response to this family. If you’ve stumbled upon this webpage because you were researching Cuba summer travel programs for teens, thanks for checking out our thoughts on the matter. You may also be interested in learning more about Sustainable Summer, our environmental leadership programs for teens, or additional advice on educating for sustainability and global learning.