On Sunday, the first cruise ship in more than 50 years to visit Cuba from the U.S sails from Miami.
More than 700 passengers are expected to be on board the Adonia, a boat that’s part of the Carnival fleet. The cruise is a key result, tourism-wise, of U.S. president Barack Obama’s visit to the island last month. And in a major reversal the Cuban government — within a week of Adonia’s scheduled departure — has allowed Cuban-born people to be among the passengers.
At the same time Obama was meeting with Raoul Castro and other officials, a company that’s been active in the tourism industry in Cuba for two decades was being taken public via a reverse takeover on Canada’s TSX Venture Exchange.
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In that deal, a shell MPH Ventures Corp. acquired Travelucion S.L., “a cash-flow positive online travel and digital media marketing company that specializes in travel marketing, electronic reservations and online booking solutions for international visitors to Cuba.“
After MPH’s change of business, the resulting company became Cuba Ventures. And it may be the only one of its kind: while other Canadian companies, have interests in Cuba (Sherritt comes to mind) those companies have operations in other countries. In contrast, 100 per cent of Cuba Ventures’ business is in Cuba.
The reverse takeover was unusual because it took place in two stages: last July, 20 per cent of Travelucion was acquired from that company’s founder, an Englishman known as Steve Marshall; last month the remaining 80 per cent was acquired. In a normal RTO the acquisition takes place on one day.
Along the way to last month’s close, the new company has also raised equity capital. Cuba Ventures has about 61.6 million shares outstanding. Marshall, who has a 30 per cent stake, is the chief executive, having recently replaced Jim Pettit.
Marshall has been in Cuba since the mid-1990s, acting initially as consultant for Western companies hoping to do business on the island. Over the past decade he has built a portfolio of 432 websites, all focused on the tourist sector. The main web sites (and six languages are offered) are travelucion.com and Cubaventures.com. Others in the stable are HavanaTur.com and CubaHavana.com
While more than one-third of the visitors to those websites are from the U.S (up from 10 per cent in December 2014 when Obama announced plans to normalize relations between the two countries) revenues from such visitors is less than five per cent of total revenue.
For simplicity, Cuba Ventures can be thought of as a company that’s a mini Expedia or Priceline. But given the popularity of Cuba as a destination for Canadians and given that tourism is the island’s largest industry and that the Americans are coming, Cuba Ventures has a considerable lead on its potential competitors.
Indeed the company said “there is a unique window of opportunity for Cuba Ventures in that there is minimal competition from American companies due to the U.S. trade embargo yet travel restrictions on Americans going to Cuba are dissipating, opening up a multi billion dollar market servicing these travelers.”
And Cuba Ventures plans to expand its range of services (from the more traditional hotels, car rentals and tours) into more higher margin business. Ecotourism, antique car rental tours, medical tourism and vacations where tourists stay in private residences (based on the HomeAway model) are all on the agenda. Cuba Ventures has listings for about 150 of the so-called Casas Particulares with plans to add another 4,000.