Cuba's Tourism Sector Faces Steep Decline Amid U.S. Tensions and Energy Crisis

Tourism Arrivals Plummet to Historic Lows

Cuba's tourism sector, a critical pillar of its economy, has witnessed a dramatic decline in recent years. After welcoming over 4 million international visitors annually in 2018 and 2019, the numbers have fallen sharply. In 2023, approximately 2.4 million tourists arrived, further decreasing to 2.2 million in 2024. The first four months of 2025 saw just over 991,000 international visitors, marking a nearly 27% drop compared to the same period in the previous year.

This downturn has led to a significant collapse in tourism revenue, which decreased by approximately 61.8% from USD 3.185 billion in 2019 to USD 1.216 billion in 2023. Hotel occupancy rates have also suffered, falling to as low as 24% in early 2025.

Impact of U.S. Sanctions and Policy Shifts

Increased tensions and tightened sanctions from the United States have played a substantial role in deterring international travel to Cuba. The Trump administration, beginning in 2017, reintroduced travel restrictions for U.S. citizens, banned U.S.-based cruise ships in June 2019, and limited commercial flights. Furthermore, U.S. citizens were prohibited from patronizing an extensive list of state-owned hotels, restaurants, and businesses.

Cuba's reinstatement on the U.S. list of State Sponsors of Terrorism has had broader implications, affecting visa exemptions for European Union citizens and others who visit Cuba and wish to travel to the United States. Cuban tourism authorities have criticized these measures, stating that they hinder access to global distribution systems like Galileo, Worldspan, and Sabre, and lead to the elimination of Cuban hotel facilities from platforms such as Trivago, Expedia, and Booking.com. The cumulative effect of these sanctions resulted in estimated losses exceeding $5 billion between March 2023 and February 2024.

Venezuela's Reduced Oil Supplies Fuel Energy Crisis

Cuba's long-standing reliance on Venezuela for oil has become a significant vulnerability. The island nation depends heavily on Venezuelan crude and refined products to power its aging energy grid and transport system. Historically, Venezuela supplied Cuba with up to 50,000-55,000 barrels per day. However, recent data indicates a reduction, with imports averaging roughly 27,000 barrels per day, representing a 15% drop.

This reduction has exacerbated Cuba's severe energy crisis, leading to widespread and frequent blackouts, some lasting over 9 hours in Havana. The energy shortages have a cascading effect across the economy, impacting not only daily life but also critical sectors like agriculture.

Broader Economic Repercussions and Internal Challenges

Beyond external factors, the Cuban government acknowledges internal challenges contributing to the tourism decline, including supply shortages, a severe energy crisis, a lack of personnel due to emigration, and low wages. Poor service quality, limited air connectivity, and infrastructure issues have also been cited as contributing factors. Despite these challenges and low hotel occupancy, the Cuban government has continued to invest in the construction of new luxury hotels.