Brand managers set sights on Cuba after Obama’s keynote address

The United States and the once-forbidden island nation agreed to lift a decades-long trade embargo. What does this mean for American business? Some marketers are already cashing in.

On the final day of his historic visit, President Barack Obama promised peace and commerce to the people of Cuba.

Many brand managers waiting for a decision from Congress on lifting the United States’ trade embargo—el bloqueo—will have to stay patient. For some, however, the president’s address publicly green-lighted plans to expand.

“We’ve begun initiatives to cooperate on health and agriculture; education and law enforcement,” Obama stated in his address Tuesday. “We’ve reached agreements to restore direct flights and mail service. We’ve expanded commercial ties and increased the capacity for Americans to travel and do business in Cuba.”

Although Cuba’s relationship with the U.S. has been on the mend since Obama and Cuban President Raúl Castro met in December 2014, today’s speech touched on specific milestones in the “process to normalize relations.”

The address officially opened the floodgates for brands. Organizations such as American Airlines and Carnival are gearing up to offer services throughout Cuba—some travel outfits had a jump on things after an agreement allowing commercial flights to Cuba to resume was signed in February.

San Francisco-based startup Airbnb got into the Cuban market last year, and according to a newly updated blog post, the company plans to improve upon its recent success.

“A year ago Airbnb proudly welcomed Cuba into our global community,” the blog states. “Cubans have been hosting visitors in their homes— casas particulares—for decades, so it felt perfect. And it has been.”

On Sunday, Fortune reported the Obama administration lifted restrictions on Airbnb’s Cuban activities. Now, travelers from around the world, not just authorized U.S. residents, can arrange accommodations through the travel-booking site.

As a result of the commercial flights agreement, Time reports that major airlines such as America Airlines, Delta and JetBlue have added routes to bring American tourists to the island. Prices for flights to Cuba are expected to drop by as much as 50 percent in the coming months.

Here’s more from Time:

On Monday, Carnival became the first U.S. cruise ship operator in 50 years to get permission from the Cuban government to sail to the island from the U.S. The cruise line says trips will begin on May 1 on its 704-passenger MV Adonia. Its itinerary will include stops at three ports of call: Havana, Cienfuegos and Santiago de Cuba. On the trip, passengers will have the opportunity to interact with artists, business owners and families in Cuba, Carnival says.

Although many brand managers are jumping at the chance to broaden their reach to Cuba, a lifted embargo could have a negative impact. Despite the Cuban marketplace’s familiarity with U.S. brands, Advertising Age reports that most residents don’t have the means to buy expensive imported products.

“European, Canadian and Latin American brands have long been available in Cuba,” John Kavulich, senior policy advisor for the U.S./Cuba Trade and Economic Council, told Ad Age. “But the fact remains that many Cubans can’t afford to buy them, so they don’t circulate very widely. Nor will American goods, at least not at first.”

Kavulich continued: “There are 11.2 million people on the island, but this should not be confused with Dubai. An extremely limited number of people have access to enough Cuban pesos or American dollars to buy American products.” RELATED: Innovate or disappear. Sharpen your PR prowess with pros from CNN Digital, The New York Times and more.

On a positive note for well-known American brands, in his keynote, Obama encouraged more travel between the two countries and emphasized the need to “build bridges between our people.”

“That’s why we’ve opened up space for commerce and exchanges [so] Americans and Cubans can work together to find cures for diseases, create jobs and find more opportunity for the Cuban people,” he stated. “The embargo was only hurting the Cuban people instead of helping them. We should not fear change; we should embrace it.”

What other implications do you think Obama’s address and the expansion of commerce between the two nations will have for American brand managers, PR Daily readers? Should more organizations gear up to expand to Cuba?



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