Airbnb Finds a Perfect Match in Cuba

In the year since it began operating here, Airbnb has already made tremendous strides in Cuba. In many ways, this success has less to do with Airbnb’s product and more to do with their understanding of the Cuban system. Airbnb had the foresight to capitalize on perfect opportunity, and overcame the challenges that could have hampered their success.

Over the past twenty years, as Cuba shifted its economy to a tourism-focused model, the government began allowing citizens to apply for a license to rent out their homes to tourists, essentially acting as bed and breakfasts. This was a necessary solution to the lack of quality hotels and helped get money into the hands of everyday Cubans.

Called casa particulars, the private houses became an increasingly popular alternative to hotels, which were operated by the government and offered bland food, poor service, and which could frequently find themselves double-booked. Tourists flocked to them, loving their charm and the “real Cuban experience.”

Because of restrictions on trade put in place by the US government, the casa particulars could not be used by American tourists until late 2014, when the Obama Administration began allowing business transactions with private individuals in Cuba. The legal change, combined with an increase in American visitors and a shortage of hotel rooms, has created a new thriving industry. Thousands of home owners are fixing up their residences, sometimes with help from relatives in the US, to meet the standards expected by foreign visitors.

This is a boon to businesses like Airbnb, which rely on private homeowners willing to rent their residences to tourists. Airbnb’s mission is to let anyone become a bed and breakfast, which has been a bit of a regulatory struggle in many cities in the US. In Cuba, Airbnb already had a robust network of private bed and breakfasts. It was essentially the Airbnb network, without the simple booking and payment systems.

Airbnb just needed to get this network online. Homeowners must register their properties and upload photos, which helped them with. They must regularly check their email to confirm reservations and communicate with their guest. This is still a challenge for many Cubans, who lack regular internet access.

As a result, Airbnb’s that aren’t run by the homeowners are often run by better-connected friends or relatives. Some enterprising individuals have found a way to capitalize on this new opportunity, serving as managers of multiple Airbnb properties. Those with internet access, like younger Cubans with a job at a tour agency, for example, offer to run Airbnb bookings for homeowners, for a cut of the rental fee.

This arrangement benefits the homeowners by bringing in more revenue and it also benefits the renter, with some potential complications. These intermediaries often manage multiple properties, so if there’s an issue with one—broken plumbing, power outages, etc.—they may take the renters to a different property. Though it’s a solution, it’s also an issue for Airbnb, which relies on photos and maps to ensure their users get exactly what they expect.

Beyond bookings, the homeowners or property managers need a way to accept money. This would usually mean a bank account with a relative in another country, but Airbnb also partners with companies that distribute cash in Cuba. So there’s a chance that the $300 an Airbnb user pays for a week stay will be cashed in the United States, given to a courier to bring to Cuban in a carry-on and then physically delivered to the host on the island.

Airbnb’s presence in Cuba has certainly benefitted the country, and one of the best parts is that it’s an easy way for tourists to ensure that the money they spend is benefiting the Cuban people. In most cases, your rental fee will go directly to the homeowners (with Airbnb taking a small percentage).

Airbnb has also helped homeowners keep their homes booked as frequently as possible, which is critical. These homeowners have often invested a tremendous amount of savings to fix up their properties and an empty home means they’re not getting a return on their investment.

Despite all the difficulties, Airbnb has been an overwhelming success in Cuba, making travel to the island much easier and getting some extra money into the pockets of the Cuban people. As connectivity increases and things like banking and transportation improve, it will only get better.

Airbnb provides a great example to those looking to make an impact in Cuba—rather than inventing a totally new system, take advantage what’s already here, and make it better.

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