VARADERO, Cuba — On their first day of vacation at Cuba's top beach resort, Canadian couple Jim and Tammy Bosch enjoyed a midmorning cocktail in the Club Hemingway lobby bar of the Marina Palace hotel.
"It was minus 30 (degrees Celsius) when we left Canada," said Jim Bosch, 49, a maintenance worker on the Montana border.
Canadian tourists are flocking to Cuba in ever greater numbers, making tourism a bright spot in the island's otherwise bleak economy. Hit by three hurricanes, rising prices for food imports and a drastic fall in the price of nickel, its top export, Cuba's economy ended one of its toughest years since the fall of the Soviet Union almost two decades ago.
"Cuba is in a very, very dire economic situation right now," said Antonio Zamora, a prominent Cuban-American lawyer in Miami who visits Cuba frequently. "They need some sort of boost, and tourism is one place where it's going to come from."
Cuba saw record tourism in 2008 with 2.35-million visitors, generating more than $2.7-billion in revenue, a 13.5 percent increase over the previous year.
The tourism boom is all the more surprising given the impact of the global economic crisis on travel to other Caribbean destinations. That can be partly attributed to the island's relatively cheap, all-inclusive packages — as low as $550 a week, airfare included.
The Bosches, part of a 36-strong wedding party, paid $1,078 each for their all-inclusive vacation at the five-star Marina Palace. The financial crisis has not hit as hard in Canada, which is easily Cuba's best client, sending 800,000 visitors last year.
Cuba recently announced major joint ventures with foreign companies in the tourism sector: 30 new hotels and a total of 10,000 new rooms, a 20 percent increase.
A 46-year-old U.S. trade embargo bars Americans from vacationing in Cuba, except for Cuban-Americans visiting family. American visitors numbered 40,500 in 2007.
That could double after President Obama fulfills a campaign promise to lift restrictions on travel by Cuban-Americans, who are allowed one visit every three years. Loosening of regulations limiting licensed travel to Cuba for academics and cultural exchanges is also anticipated.
Cuban officials say they aren't planning on it.
"Our philosophy is not to be surprised if it happens, but not to wait for it to happen in order to continue constructing new hotels," said Miguel Figueras, a senior Tourism Ministry adviser.
Tourism officials hope to entice Americans back to the island's annual Billfishing Tournament, named after Ernest Hemingway. The 59-year-old event, held in June, was popular with U.S. competitors until the Bush administration restricted travel.
"We hope in the next years with a new president the American boats will start coming back," said Figueras, noting that about 50 U.S. boats competed in 1999, out of a total of 80.
Cuba needs all the financial help it can get from its tourism sector as it braces for a tough year, experts say.
Last year, hurricanes caused $10-billion in damage, equivalent to 20 percent of the national income.
"Hurricane recovery needs and high food and fuel prices pushed up imports 43.8 percent," said Johannes Werner, Sarasota-based editor of Cuba Trade and Investment News.
"As a result, the trade deficit soared by 70 percent, or $5-billion, to $11.7-billion in 2008 … twice as big as in 2007, and it's proportionally the highest in 13 years."
Cuba's cash crunch is likely to continue throughout 2009, Werner adds, although the government plans to slash expenses by half this year.
The state's budget accounts "simply don't square," President Raul Castro said in a closing speech to the National Assembly on Dec. 27. Unable to support its pension system, the assembly voted to raise the retirement age by five years, to 65 for men and 60 for women.
Recognizing the need for assistance, Cuba is on a diplomatic offensive to improve ties with its neighbors, culminating in December with its acceptance into the Rio Group, the largest club of Latin American nations. Castro has received major offers of economic support from Brazil and Venezuela.
Castro may also open the economy to limited free market measures, some experts believe. Cuba recently said it would issue new taxi licenses to private car owners to compete with state cabs.
The government also plans to redistribute idle state land to private farmers, though the process of handing it out has been slow.
In his speech, Castro repeated a favorite theme: the restructuring of salaries according to employees' productivity, rather than egalitarian socialist principles of revolutionary sacrifice.
"Let's not deceive ourselves anymore. If there's no pressure, if there isn't a necessity to work to satisfy my necessities, and if they're giving me free stuff here and there, we'll lose our voice calling people to work," he said. "That's my way of thinking, and that's why everything I'm proposing is going towards that goal."
David Adams can be reached at email@example.com.