US travel warning affects Cuba’s small business operators.

US travel warning affects Cuba’s small business operators.

HAVANA- A U.S. State Department travel warning for Cuba following mysterious attacks that harmed nearly two dozen American diplomats has come like a bucket of cold water for the aspirations of thousands of private entrepreneurs on the island.

In the middle of a sudden political defrost between the Cold War enemies that started in 2014, numerous Cubans privately invested on restaurants, homestay B&Bs and autos to work as taxis with expectations of an expected boom of American tourists.

In any case, now business visionaries worry Americans will be scared away —disregarding that there has been no expression of any tourist affected.

Nowhere are such feelings of trepidation more pronounced than in Old Havana, where several Cubans bought into a hot real estate market as part of an expansion of B&Bs catering to the crowd of tourists who stroll its cobblestoned streets each day.

“We got to work opening businesses, such as restaurants, bars and rental homes, and many people invested everything we had, and even borrowed,” said Yunaika Estanque, the 51-year-old owner of a three-room hostel.

Estanque partnered with her parents and two children. They all sold other properties and sought additional financial backing from a friend who lives overseas, and two years ago bought a rickety colonial home steps from the Bay of Havana.

Today it has been array and reborn as the Mi Tierra (My Land) hostel, whose vintage floors, warm pastel-colored walls, republican-era furniture and modern AC make for attractive and affordable digs at just $35 a night per person plus $5 more for breakfast.

Mi Tierra started operating two months ago and most of its customers are Europeans, but it’s Americans that Estanque truly has in mind long-term. Estanque considers American tourists to leave good tips and consume a lot.

In addition to the travel warning announced Friday, the State Department also said it was reducing by about 60% its diplomatic staff at the U.S. Embassy in Havana and indefinitely suspending visa processing in Cuba. On Tuesday, Washington went further, expelling 15 Cuban diplomats to protest Havana’s failure to protect American envoys from the attacks, which have not been explained.

The United States has not accused Cuba of being behind the attacks. President Raul Castro’s government has disavowed any culpability and called the U.S. response “reckless,” ”hasty” and politically motivated.

Tourism is an important source of badly needed foreign currency for Cuba, one of a handful of key sectors that keep its weak economy sputtering along.

According to government statistics, last year about 4 million travelers visited the island. That included 281,000 Americans, up from just 91,000 in 2014. There were also 400,000 visits last year by Cubans living overseas, most of them in U.S.

U.S. tourism to Cuba is still small compared with the numbers already coming from Canada, Europe and elsewhere. But analysts have predicted that if the U.S. embargo on Cuba were to be lifted entirely, 1 million or more American travelers could inundate the island on an annual basis.

It’s too early to tell how significantly American tourists may be discouraged by the State Department warning.

With the increase in American travelers in the last three years, “there was a positive effect and a desire to improve the level of services, of quality,” said Martin Payne, a Briton who lives on the island and represents a U.K. tour agency. “With this (possible) decrease, we’ll see if the momentum continues or if a fall is on the way.”

“A lot of people wanted to come to Cuba before the American avalanche. … The Europeans are going to say, ‘Well, (now) we can wait, there’s no rush,” Payne added. “It will go on the list to visit in the future.”

Measures announced by U.S. President Donald Trump in June had already sought to limit American travel to Cuba somewhat by barring so-called people-to-people educational trips outside of those run by licensed operators.

Despite assurances that the goal was to support Cuba’s burgeoning class of independent entrepreneurs, those measures were considered as likely to steer U.S. travelers away from privately run B&Bs and restaurants and toward the government-run hotels that have larger capacity and long-established relationships with tour operators.

If tourism suffers it would add to a list of other economic woes in Cuba, which had its energy grid and agricultural sector hammered by Hurricane Irma. Venezuela, Cuba’s most important ally and commercial partner, is in the throes of a far more severe economic crisis and has been forced to cut back oil shipments on terms seen as preferential for Havana.

Many who depend on the tourism industry say they already noticed a lull in September, when the hurricane hit, after several years when suddenly it seemed the high season was lasting year-round.

“We live off tourism, and right now my household income comes from this taxi,” said Alejandro Sito, a 25-year-old cabbie who was waiting for fares in front of a hotel in the capital.

“How are we going to support ourselves?” asked his colleague, 34-year-old Angel Hernandez. “It’s going to get tough for us.”