Cuba has long been a popular attraction for tourists from all over the world but particularly to American tourists who at some point constituted 80% of visitors until 1959. Such tourism became Cuba's third largest source of foreign currency, behind the two dominant industries of sugar and tobacco. Tourism is again one of Cuba’s leading revenue sources.
The Great Depression of the 1930s, the end of prohibition, and World War II severely stifled Cuba's tourist industry, and it wasn't until the 1950s that numbers began to increase once again. During this period, the leisure and tourist industries were controlled by American organized crime, and Havana became known as "the Latin Las Vegas". After the triumph of the revolution, Castro ordered the closing of many bars and gambling halls, associated with prostitution and the drug trade, ending Cuba's image as a hedonistic getaway. Hotels, clubs, and beaches were made accessible to the Cuban population at affordable rates. But the fears of the unpredictable consequences of Cuba’s socialist revolution caused a rapid decrease in travel to the island.
In January 1961, relations between Cuba and the US deteriorated as a result of bank and business expropriations, mass exodus, and private property being declared illegal by a now openly communist regime being backed by the USSR. Tourism travel to Cuba was soon outlawed by the U.S. State Department, and tourism that year dropped to 4.000 visitors. During the next three decades visitors to Cuba were few and the number did increase gradually, but it wasn't until the early nineties that they would return to those seen before the revolution.
The Soviets were Cuba's chief trading partner providing substantial subsidies to Cuba's sugar industry. The collapse of the Soviet Union triggered a crisis in the economy, and sent the country into a deep economic depression known in Cuba as the Special Period. The crisis precipitated the communist regime to find new avenues of income. Policies were drawn up to procure the growing tourist markets of Canada and Europe with an aim to replace Cuba's reliance on the sugar industry. During the nineties the number of available rooms to international tourists nearly tripled, and tourism surpassed sugar as Cuba's chief earner. During the late 1990s visitors came mostly from Canada and Western Europe and tourist areas were highly concentrated around Varadero, Cayo Coco, the beach areas north of Holguin, and Havana. Today, travelers from around the world visit Cuba, the largest numbers come from Canada, and Europe, with visitors arriving mainly from Great Britain, Spain, Italy, France and Germany. According to some statistics around 20,000 to 30,000 Americans illegally travel to Cuba every year, while the Cuban government puts it higher at over 60,000.
Mass Tourism was introduced in the nineties to combat the scarcities of the post USSR period and with it came the seeds of capitalism and its idiosyncrasies. With the advent of mass tourism during the nineties the egalitarianism espoused by the revolution started to dwindle, Those having contact with the lucrative tourist industry suddenly found themselves with a substantially higher income than, professional, industrial and agricultural workers. This also sowed the seeds of disenchantment with the regime among younger generations. On witnessing the struggle to make ends meet of parents who had dedicated many years to educating themselves, new generations are deterred from study and self-improvement. This youth is fast acquiring the same vices and indifference of youth in developed capitalist countries.
Many independent travelers chose to stay in Casas particulares, which are private residences in Cuba which have been converted to allow paid lodging, these allow visitors to have a closer contact with the reality of Cubans. Until 1997 however, contacts between tourists and Cubans were de facto outlawed by the Communist regime, and to ensure the segregation of international tourism from the state insulated Cuban society, tourism it was to be promoted in enclave resorts where, as much as possible, tourists would be segregated from Cuban society, this practice came to be known as "enclave tourism" and "tourism apartheid". The policy started in 1992 of restricting hotels and services only to foreign tourists was ended by the government of Raúl Castro in March 2008. As well as officially allowing Cubans to stay in any hotel, the change also opened access to previously restricted areas such as Cayo Coco. However, access remains very limited in practice, as the vast majority of Cubans do not have the financial means that would allow them access to these Hotels.