* Cuban tourism industry at full capacity, experts say
* Americans tourists on rise under new U.S. regulations
* Many tourists interested in seeing economic reforms
By Jeff Franks
HAVANA, Jan 24 (Reuters) - The Arab Spring, changes in U.S. policy and economic reforms at home are driving a tourist rush that is giving communist-run Cuba one of its best seasons ever and stretching its ability to accommodate demand.
Hotels are full to the brim and Old Havana, the capital’s historic center, is teeming with tourists from around the world, soaking up the warm winter sun in outdoor cafes and strolling through narrow colonial streets.
Along the nearby Malecon, Havana’s seaside boulevard, 25 buses were lined up on a recent sunny day, waiting to carry visitors to their next destinations.
At the Bodeguita del Medio, where Ernest Hemingway supposedly drank mojitos and tourists now go to emulate him, almost as many people stood on the stone-paved street waiting to get into the jam-packed bar as were squeezed inside.
“We are at capacity. The beach resorts, Havana city are totally full. In the interior of the country, there is nowhere to find a room, nowhere,” said the manager of a foreign hotel company.
Like most other people interviewed for this story, the manager asked not to be named to avoid problems with the Cuban government.
Cuba just completed its best year for tourism with 2.7 million visitors in 2011, and experts say current bookings suggest it will almost certainly beat that number in 2012.
“I think 2012 will be a very good year and I see real difficulties in how to organize and manage all this in 2013 and 2014,” said the head of a European travel agency’s Havana office.
Tourism is a top hard currency earner for the cash-strapped Caribbean island, with revenues of about $2.3 billion in 2011.
Travel experts say there is continued growth in the number of visitors from Canada, by far the biggest market for Cuba, and rising numbers from countries such as Russia and Argentina.
This high season has also seen a resurgence in visitors from Europe, where numbers had fallen off in recent years, as many people who usually go to North Africa for a winter vacation are now looking elsewhere because of security concerns following the Arab Spring uprisings last year.
The political stability and lack of crime in tightly controlled Cuba are as attractive to them as the island’s beautiful beaches.
“It’s just a sort of insecurity. Especially in the German market, if there is a crisis somewhere, they immediately stop going. Cuba is viewed as safe,” said the travel agency head.
“You want security, that’s Havana. I would estimate that from France alone tourism to Cuba is up 20 percent largely because of events in North Africa,” said the hotel company manager.
He said Egypt, where tour packages are comparably priced to Cuba and political unrest continues, is losing the most customers to the Caribbean island.
Cuban Americans have been flooding into Cuba since U.S. President Barack Obama lifted restrictions for them to travel to their homeland in 2009.
Cuba has not released its yearly tourist numbers by nationality for 2011, but unofficially 375,000 Cuban Americans were said to have come to the island in 2010.
Mostly they stay with family members and are not the ones filling up hotels, but they do rent lots of cars.
They are known to sometimes burn cigarette holes in the seats in a show of spite for the government they or their family fled from, and for the extremely high prices it charges for rental cars, said one of the travel industry experts.
But now the number of other American visitors is climbing after Obama changed regulations in 2011, making it easier for non-Cuban Americans to enter a country the U.S. trade embargo has generally made off-limits in the past 50 years.
“I‘m having enormous difficulty finding places for my customers. It’s the Americans, they’re getting all the good beds,” complained a Cuba travel company owner, referring to rooms in the best hotels.
Around Havana, it has become more common to see Americans on the streets and in restaurants, although they are somewhat isolated from other tourists because the new regulations require that they come as part of tours that are supposed to be educational and “purposeful,” not recreational.
“I keep hearing there are a lot of Americans, but I haven’t seen that many around,” said a New Zealander.
In pursuit of what is known as “people to people” contact, they spend their days visiting museums, schools, hospitals and tobacco farms with only a limited amount of time for wandering about.
Americans approached in Cuba to discuss their experience tended to be reluctant to talk and in some cases defensive, apparently fearing retribution from their government.
“We don’t want to advertise that we’re here. I don’t think that would be very smart,” said an elderly man as he quickly walked away toward the safety of the Hotel Nacional.
Cuba says that, excluding Cuban Americans, 63,046 Americans visited the island in 2010.
The U.S. government began issuing licenses for Cuba travel under the new rules last summer and most organizations that got them had to spend several months gearing up.
“I think right about now the American groups are starting to come,” said Tom Popper, director of U.S. travel company Insight Cuba. He said demand has been strong, and that his group has already brought or signed up 2,200 people for trips.
The National Geographic Expeditions website shows that it has 17 tours of Cuba planned from now through May and all are totally booked.
For Americans, the attraction of Cuba is partly that it has been forbidden fruit for so many years, Popper said.
But for them and others, President Raul Castro’s campaign for economic reform is a drawing card as well.
Under the changes, Cuba is moving away from its stumbling, Soviet-style economy into a communism where private initiative is encouraged and the role of the state lessened. More than 350,000 people now are self-employed, private home-based restaurants are mushrooming and cars and houses can be bought and sold.
“Many people are coming because they want to see Cuba as it has been and is, the old cars and that sort of thing, but they are also curious because they read a lot in the papers about things changing and they want to see that, too,” the European travel agency director said.
At the ornate Museum of the Revolution, once Cuba’s presidential palace, tourists pause to see the Granma, the yacht that Fidel Castro and his fellow rebels sailed from Mexico in 1956 to start the revolution.
“My family thought Fidel Castro was wonderful and supported the revolution. I wanted to see it now, before it changes too much,” said Argentine Abel Castano as he looked at the boat, now in a glass-enclosed exhibit on the museum grounds.
The restaurants, or paladares, are at the top of many tourists’ must-see lists because they offer a unique experience of dining out in someone’s home and because their food also is usually better than the dreary fare at most state restaurants.
For those in the travel industry, Cuba’s success is a blessing and a curse. Sales are good and profits are up, but the demand has put a spotlight on the need to expand and improve the tourist infrastructure, especially in the cities.
Faced with more tourists than rooms last month, the government took the unprecedented step of allowing two travel companies to put their groups in private homes that rent rooms, said the hotel company manager.
And overbooking, especially at the better hotels, is forcing a scramble to find bumped tourists a place to stay. “I do this every day and every day it is terrible,” the hotel company manager said.
Cuba’s best hotels are not considered equal to the best in other countries and standards drop quickly into mediocrity or worse, depending on price and location. Some are poorly maintained and don’t have hot water.
Even at the landmark Hotel Nacional, a recent American visitor complained that his room was “dank” and had a few roaches.
Popper said he tells his tour groups that “all the hotels in Cuba are safe and clean, but coming to Cuba isn’t about staying in your hotel, it’s about being in Cuba. You need to have the mindset to just go with it.”
Cuba has invested heavily in building beach hotels, but in Havana and popular tourist destinations like Cienfuegos and Trinidad, many more rooms, particularly of good quality, are needed. The tourism ministry says there are 52,000 hotel rooms, of which 65 percent are supposedly four- or five-star quality.
“We need more hotels and we need more four-star hotels,” said the travel agency director, who estimated that Havana alone needs 2,000 additional rooms.
The travel agency director said the government has moved too slowly to prepare for the tourist boom, and “we will have five years of difficulty” while more hotels are built.
“Business will be good for everybody because people are coming in, but everybody will have to fight for rooms. And I suppose prices will go up,” he said. (Editing by Tom Brown and Kieran Murray)