Cuba Is Now Airbnb's Fastest Growing Market

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As an infant, Carlos Jimenez survived a U.S.-backed invasion of his south Cuban village, the infamous failed coup at the Bay of Pigs in 1961. Today, Jimenez is expecting another American invasion -- of tourists -- as he awaits the chance to list his home on Airbnb.

“I never had the chance to visit the U.S., so I’m looking forward to them coming here,” he said by his green one-story house, lamenting that his village of Playa Giron still lacks Internet access for the reservation and payment system of the online home-sharing startup.

With Wednesday’s announcement by the U.S. and Cuba that they will re-open embassies this month, the one-time enemies took a major step closer to normalized relations, and Airbnb Inc. is poised to capitalize on its early entry into the market. After starting operations on the island in April, the company has sought ways of working in a country where the government regulates nearly every aspect of life, U.S. credit cards aren’t accepted and online payments barely exist.

But by planting its flag early, the San Francisco-based company says it is seeing results. Cuba is now its fastest growing market, co-founder Brian Chesky said in May. The number of Airbnb guest homes in Cuba has more than doubled to over 2,000.

Casa Colonial 1830 has been a family home for five generations. Source: Casa Colonial 1830 via Bloomberg
Casa Colonial 1830 has been a family home for five generations. Source: Casa Colonial 1830 via Bloomberg

One of them is Casa Colonial 1830, a high-ceilinged hostel run by Yosvaldo Saroza, who charges $30 a night. Payment, which in most of the world comes electronically, arrives in cash through a travel agency, Vacuba, that hand delivers it until online payments can be established.

“We’ve received a lot of interest,” the 28-year-old Saroza said inside the home his family has owned for five generations. “The guests who arrive know exactly what they’re getting. So far it’s been a great service.”

Online Video

Airbnb isn’t the only U.S. Internet-based company seeking inroads in Cuba. Netflix Inc., the online video-subscription service, began offering its services in February. More established companies, including airlines from Jet Blue to American, have said they’re interested in flying to Havana once legal restrictions are lifted.

Carlos Jimenez sits on Playa Giron guesthouse's porch with his wife. Photographer: Andrew Willis/Bloomberg
Carlos Jimenez sits on Playa Giron guesthouse's porch with his wife. Photographer: Andrew Willis/Bloomberg

They will find substantial hurdles: two currencies, salaries for Cuban workers paid to the government and stifling bureaucracy.

“At the end of the day, there’s this Cuban side of the equation too,” said Francisco Cerezo, a Miami-based lawyer who co-chairs the international practice at Foley & Lardner and visited Cuba in May. Companies “have to go down there and see what’s viable, what’s allowed there and what the context is.”

Human Rights

And not all the problems are procedural. The U.S. State Department said on June 25 that Cuba remains a place where human rights abuses are committed with impunity by officials at the behest of the government, citing arbitrary detentions and arrests.

While the rest of the world has had ties with Cuba for decades, the U.S. embargo has limited the ability of Americans to vacation there. Many of those who do come are on officially sanctioned trips, licensed by the U.S. Treasury Department.

About 51,000 U.S. citizens visited the island in the first five months of this year, up from 37,000 in the same period a year earlier, according to data published by the Associated Press.

“For a half-century Americans have had a desire to be able to go to Cuba and it wasn’t real easy, and well now it is, or at least a lot easier,” Chesky of Airbnb said.

‘High Demand’

Airbnb hosts operate “casas particulares” -- usually family-run establishments -- and earn about $200 per booking, according to Jordi Torres, the company’s general manager in Latin America. That’s a fortune in a country where the average wage is just over $20 a month.

Spain’s Melia Hotels International SA says its bookings in Cuba have never been higher. It currently has 27 hotels across the island and is building two more.

“There’s very high demand in Havana,” said Elvira Ameijeiras, Melia’s social and communications manager in Cuba. “Normally we’d be entering a low season now, but this year it’s not happening. There’s been an increase from North America, but also a more general one. Cuba’s in fashion.”