Speaking in Miami last week, Trump said he was re-imposing certain travel and trade restrictions eased by the Obama administration, describing it as a "completely one-sided deal".
The president says his new policy will tighten rules on travel and on sending funds to Cuba. The plan limits travel to Cuba to just groups, stating: “Among other changes, travel for nonacademic educational purposes will be limited to group travel.”
Announcing the changes on Friday, he cited human rights concerns, saying doing a deal with the "brutal" Castro government was "terrible" and "misguided".
However, he will not close the US embassy in Havana, commercial flights from the US will continue, and Americans will still be able to return home with Cuban goods.
David Scowsill, president and chief executive, WTTC, said: “Airlines, cruise lines and hotel groups have all made significant investments and plans to create jobs and to grow the industry in Cuba, based on clear direction from the previous administration.
"Our sector needs consistency from governments and stability of policy. This is a clear and unwelcome reversal.”
Cuba is already a very popular tourist destination, currently the second most-visited Caribbean island.
Canadians and Europeans have steadily increased their numbers, with direct flights into various beach locations on the island.
Visitor exports, which is money spent by foreign travellers in the country, totalled US $2.8 billion in 2016, according to WTTC.
This represents 19.2% of total exports – significantly above the global average of 6.6%.
The travel sector contributed almost $9 billion to the Cuban economy last year – or just under 10% of the country’s GDP - and supported almost 500,000 jobs.
“There is latent demand from the US for people to visit Cuba to explore its history and culture, and it would be a retrograde step to revert once again to Americans travelling in groups,” continued Scowsill.
Over the last months the uptake in travel from the US to Cuba has not been as high as expected, primarily as hotel capacity has not kept up with the demand, leading to some of the US airlines cutting back capacity to the island.
President Trump’s announcement will put further pressure on the airlines,” Scowsill continued. “There is plenty more scope to grow the travel sector in Cuba.
“Rolling back this policy and allowing US citizens to only enter the country on organised tours, means that less tourism dollars will find their way to the Cuban people.
"Tourism is a force for good, it bridges gaps between cultures and empowers local people by creating jobs and income streams. We would urge the Trump administration to support the Cuban people.”