WSJ: Airbnb Extends Hospitality to Cuba

Airbnb plans to make use of Cuba’s wide network of casas particulares—private accommodations in homes that are made available to tourists.

Airbnb Inc. said it has opened its website to listings in Cuba, making the home-rental marketplace one of the first U.S. businesses to take advantage of the recent thaw in U.S.-Cuban relations.

American travelers who obtain a special license from the U.S. government to visit Cuba now can book stays through Airbnb at more than 1,000 apartments and homes in the country, the company said Thursday.

Since the U.S. and Cuba announced their détente in December, U.S. companies—including many in the technology and telecommunications industries—have been evaluating business opportunities on the struggling communist island, as it looks to boost its economy and attract foreign investment.

Airbnb said it expects significant U.S. demand for Cuban accommodations, adding that there was a 70% increase in searches from the U.S. for listings in Cuba after the U.S. eased trade and travel restrictions.

This year, it said, more Americans have searched online for Cuba than other Latin American hot spots, including Rio de Janeiro, Mexico City and Buenos Aires.

So far, the U.S. government has authorized Airbnb to work only with licensed American travelers. but the company said it plans to seek permission to help non-U.S. travelers who need a place to stay in Cuba.

San Francisco-based Airbnb plans to make use of the country’s wide network of casas particulares—private guesthouses in homes that are made available to foreign tourists. The guesthouses were among the country’s first experiments with private business in decades and have become a popular low-budget lodging option, costing as little as $30 a night. They were made possible by reforms introduced by President Raúl Castro in 2010 that also allowed Cubans to open small restaurants in their homes. Those measures were aimed at helping the country capitalize on the vital tourism trade.

Around 40% of the guesthouse operators who have listed with Airbnb are in Havana, the company said.

Among the new Airbnb listings is a $25-a-night bedroom with minimalist furniture in central Havana. The room is just a stone’s throw from the city’s Malecón sea wall, where locals and tourists sit each night to people watch as 1950s-era American vehicles cruise by. An equally inexpensive alternative is located 200 miles southeast of the capital, in the colonial city of Trinidad, which has cobblestone roads and is near pristine beaches. Fancier lodging is also available, including the $350-a-night Concordia House, which has three bedrooms with modern furniture, high ceilings and a terrace with views the capital and the sea, all within a short walk of Old Havana.

“The shared housing model already existed in Cuba,” said Dan Restrepo, a former adviser to President Barack Obama on Latin American policy who worked with Airbnb on its expansion to Cuba. “Because the model existed, Airbnb can go work directly with Cubans and with much less interaction with the Cuban government.”

Airbnb said it isn’t permitted to open an office in Cuba or hire local residents as full-time workers. So the company sent employees to meet with guesthouse owners. It is contracting with local photographers to take photos of their listings. And because credit cards aren’t widely used in the country, Airbnb is working with a local cash remittance service to pay homeowners cash for the guests they book.

As in any country where it operates, Airbnb will take a 3% cut from hosts every time a rental is booked, and guests are charged 6% to 12% depending on the price. While Airbnb’s potential profits in Cuba may be small compared with many of the 190 other countries where the service operates, its move into the country shows it can sometimes move more quickly than competitors in the hospitality industry and skirt government regulations that they can’t.

Cuba has a limited number of hotel rooms, a significant hurdle in expanding tourism. And the U.S. trade embargo still makes it difficult for American hotel operators to enter the market there, since they would have to buy or rent physical property and employ full-time staff.

Americans are permitted to visit Cuba if they fall into one of 12 categories, from family members of Cubans to professionals attending meetings in the country. Collin Laverty, owner of a travel service that arranges 150 group trips to Cuba a year, expects around 125,000 Americans who aren’t of Cuban descent to visit the country this year, up from about 90,000 last year. “There are more Americans figuring out how to go legally, and not on a tour, so they are going to have more flexibility in their lodging options,” Mr. Laverty said.

In offering its services in Cuba, Airbnb joins other U.S. companies such as Netflix Inc.,which in February made movie-streaming available there, and New Jersey-based IDT Corp., which in March became the first U.S. phone company in decades to allow direct calls between the countries.

In recent months, U.S. and Cuban officials have held talks over restoring diplomatic relations and allowing U.S. technology companies to sell equipment and services in Cuba.Telecommunications has played a central role in the discussions as Cuba, one of the least-wired countries in the region, looks to increase Internet access, U.S. officials say. In December, the White House released a fact sheet that said Internet penetration in the country was just 5% of the population.

“While some hosts have limited Internet access, others are working with hosting partners to help them manage their online requests and bookings,” Airbnb said.

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