Cuba Ventures Releases Letter to Shareholders from President Jim Pettit
VANCOUVER, British Columbia, June 08, 2016 (GLOBE NEWSWIRE) -- Cuba Ventures Corp. (TSX-V:CUV) (OTCBB:MPSFF) (Frankfurt:IJA2) (the “Company”), an online travel and digital media company specializing in travel marketing to Cuba, today released an in-depth Letter to Shareholders from President Jim Pettit.
My Fellow Shareholders and Investors:
With President Obama’s recent and historic trip to improve US trade relations with Cuba, which actually began almost eighteen months ago, the economic and investment opportunities that loom are significant. Investors seeking exposure to Cuba need to find unique opportunities with companies focused on the island nation as well as have an intimate social and economic knowledge of the country.
For context, let’s take a brief look at the progress of Vietnam which, 20 years ago, had a punishing US trade embargo lifted. The Vietnam Stock market opened at a base of 100 points in mid 2000 and is north of 600 points today. Vietnam has become America’s 29th largest trading partner with bilateral trade of more than $30 billion. Vietnam is regarded by US businesses as one of the most promising markets in Southeast Asia.
We believe there are similar and significant investment opportunities for those early into Cuba’s impending growth.
Why Cuba Ventures?
The Company and its team have a number of competitive advantages including being a first mover into Cuba. Most competitors have yet to build any meaningful Cuban economic relationships and without the necessary knowledge, things can take a long time to get done in Cuba. Our team has a combined 50 years’ experience in Cuba and we are continuing to expand both in scope and market share.
From the opening bell on Monday, March 21st it became apparent that Cuba Ventures’ carefully executed and strategic positioning over the last 20 years as the go-to e-commerce and informational platform for Cuba travel and digital media had garnered significant investor interest.
Cuba Ventures owns Travelucion Media, a company that was founded by Mr. Steve Marshall, who has recently been named Chief Executive Officer of Cuba Ventures as well. Mr. Marshall spent more than a decade in Cuba specializing in Cuban joint ventures and successfully founded a number of companies including:
- Primeras Inversiones in the Havana Free Zone
- First State approved Real Estate joint venture with CIMEX
- Dimension W-Tech: a start-up joint venture with the Ministry of Communications
- First Cuba-centric online marketing company handling over 30 million annual internet visitors with the Ministry of Tourism
Currently, Travelucion owns a vast portfolio of web assets consisting of 432 Cuba focused websites, which generate over 30 million page-views per year and direct traffic to the company's online booking and e-commerce sites. These websites cover all facets of Cuba including over 80 travel destinations, hotels & resorts, bed & breakfasts, tours, car rentals, restaurants, as well as Cuban culture, music, celebrities, sports, health care and more. In reality Travelucion has been and remains one of the only established Cuba-centric digital media and travel related platforms since 1995.
Investment Highlights
The growth potential of CUV is extremely compelling. With our extensive history in the emerging Cuban market that has been plagued by many barriers to entry, as well as the proprietary nature of our software, the Company is in position to grow its market share. Other businesses and groups will be forced to quickly spend untold millions to break into the Cuban market.
The case could be made that it may well be easier for various travel behemoths to simply acquire Cuba Ventures. In either case, Cuba Ventures is one of the only public vehicles that allows quick and quality exposure to the ongoing growth in Cuba.
Initial enthusiasm aside, I am confident that strong revenue growth over the last few years is sustainable for the long term. While the relationship between the US and Cuba remains complicated, the first mover advantage is already apparent and early entrants will have a distinct advantage.
Why is this thaw in social and economic relations happening now?
In the most recent edition of The Atlantic, Ben Rhodes, Obama’s deputy security adviser stated,
“By opening up travel, by opening up commerce, you’re going to empower the Cuban people. They’re going to get more resources; they're going to have more interconnectivity to the rest of the world. This over time has a greater chance of improving the human-rights circumstances in Cuba than isolation and pressure.”
Travelucion's revenues have been rapidly increasing in the wake of notable shift in American policy towards Cuba as relations between the two nations normalize.
Travelucion Media has developed and owns one of the most significant portfolios of Cuban focused web assets generating over 30 million page-views per year, directing traffic to the main Travelucion Media booking and dozens of e-commerce sites including the flagship booking platform www.havanatur.com.
To show our confidence in this new company, insider CUV share ownership by management and other insiders exceeds 40 percent.
Cuba (Ventures) in the Future
Travelucion is in position not just to capitalize on Cuban growth, but also to handle the increasing rise in revenues and bookings. The websites, most of which have been active and continually updated since 1995, have a robust, complementary social media presence to enhance the user experience.
Furthermore, Travelucion has few US competitors given the current trade embargo. The two largest online travel companies, Expedia and Priceline, are not active in Cuba.
As a result of easing restrictions on Americans traveling to Cuba, US travel to Cuba has increased an impressive 50 percent over the last year.
On March 15th, 2016, the Obama administration announced further changes prior to its March 20-22nd trip:
- Make travel easier under the current 12 exemption categories (cultural, educational, religious, etc.)
- Further loosening of trade and banking rules
- Revised regulations on how the US dollar can be used to trade with Cuba
The general ban for American tourists going to Cuba remains in place and will likely take some more political jockeying. That said, “The rule changes are likely to allow more people to go on self-directed ‘people to people’ and cultural trips without having to rely on group tours or be sponsored by an organization," two people familiar with the discussions said. (Reuters)
Cuba Ventures plans to prepare its booking platform, as part of an overall upgrade, for the Global Distribution (GDS) booking systems. While others scramble to capture market share, Travelucion is readying itself for additional rapid growth through streamlined bookings through a GDS, long-term established relationships with state-run Cuban travel suppliers for manual bookings as well as conclude contracts with other specialized travel groups servicing Cuba. All of these growth plans should provide ample news flow over the coming months as well.
Partnership with the Mercosur Chamber of Commerce
On Tuesday, May 31st, Cuba Ventures announced a partnership with the Mercosur Chamber of Commerce. Mercosur CC, headquartered in San Paolo, Brazil, was established in 1991 and covers a territory of six of the twelve countries of South America with total population of approximately 290 million people.
The primary goal of Mercosur CC is to further investment within South and Central America. Mercosur's purpose is to promote free trade and the fluid movement of goods, people, and currency as well as to facilitate investment within South and Central America. Mercosur merchandise trade, excluding Venezuela, grew from US$10 billion at the inception of the trade bloc in 1991 to over US$88 billion in 2010.
The collaboration agreement between Cuba Ventures and Mercosur CC will open up many opportunities for the Company to work with Mercosur on travel related opportunities, digital marketing initiatives and potential consulting agreements. Cuba Ventures' team has over 50 years' experience in Cuban commerce and investment which will be of value to Mercosur members interested in investing in Cuba.
Cuba Ventures' CEO, Steve Marshall stated this in regards to the newly formed partnership: "We are very excited to have partnered up with a group as prominent as Mercosur CC and view this as the start of a strong working relationship between Cuba Ventures and Mercosur and its member countries. There are renewed synergies between Mercosur members and the Republic of Cuba, and our team can bring a wealth of knowledge to those entrepreneurs and businesses considering the attractive and relatively untapped investment potential Cuba has to offer. Given the rapidly growing travel market in Cuba, there is a natural fit with Cuba Ventures and we expect numerous opportunities to materialize from this partnership for the Company to grow its current travel business. Beyond our working knowledge of Cuban bureaucracy, legal and financial structures, we are also able to offer worldwide marketing support for investors through our 432 multi-language Cuban focused websites collectively generating over 30 million page-views per year of highly targeted web traffic interested in everything Cuba. The recipe of proven consulting expertise and ongoing marketing support for future investors has undoubtedly been the reason we were chosen to aid Mercosur CC members going forward."
Medical Tourism
Besides straight vacation travel, one of the most robust growth areas is Medical Tourism. The sector revenues are expected to rise to $32.5 billion by 2019, which represents an impressive 17 percent CAGR from 2012.
The Cuban health care system is world renowned for quality of procedures and care and competitive pricing; perfectly situated only 90 miles off the coast of Florida.
Travelucion currently offers access to 252 medical procedures and treatments, from minor procedures to major and complex operations and cancer therapies. As prices and wait times increase in other countries, Cuba’s underutilized medical industry is becoming more and more popular. As well, those patients will want and need accommodation and some rest and relaxation while recuperating. All of this is available through Travelucion, which receives a 10 percent commission on each medical procedure and treatment transaction booked through one of its many Cuba focused websites.
Cuba Ventures still holds mineral assets from its previous incarnation as MPH Ventures. Management will look to sell or spin these properties out in a new public vehicle, maximizing the benefit to shareholders.
At Cuba Ventures, we appreciate your interest and support during these exciting times. Our singular mandate is clear: build consistent and sustainable shareholder value as Cuba continues to open up. We plan to be there every step of the way, just as it has been for more than two decades.
Feel free to email me with any questions or comments. I look forward to speaking to you again soon.
Sincerely,
Jim Pettit
President
Cuba Ventures Corp.
604-687-3376
info@cubaventures.com
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