Yesterday, room-rental service (and hotel competitor) Airbnb announced that it would list rooms in Cuba on its database for licensed travelers to the island country. Starting this week, potential hosts in Cuba will list over 1,000 of their homes on Airbnb.
Airbnb expects "significant demand" for Cuban accommodations from the U.S. According to a statement, following President Obama’s relaxing of the embargo restrictions in December, Airbnb saw a 70-percent spike in searches from U.S. users for listings in Cuba. In 2015, Cuba has already become one of the company’s most searched-for destinations in Latin America, surpassing Rio de Janeiro, Buenos Aires or Mexico City in American searches.
A spokesperson for Airbnb said that the company is looking to operate in Cuba "in a manner that is fully consistent with U.S. law. U.S. Treasury Department regulations released in January 2015 allow U.S. companies to provide Cuba-related travel services for licensed U.S. travelers...As far as Cuban authorities are concerned, Cuba has already created a regulatory framework for short-term rentals with the casas particulares network that is in place today. Airbnb has informed Cuban authorities that the company intends to launch this service and believe they see the benefits of allowing American travelers to more efficiently tap into the casas particulares system."
This seems to be a sign of things to come for Cuba's hospitality scene, and for international interest in the country. For example, as the Associated Press pointed out, MasterCard recently unblocked its services in Cuba, even though most credit-card issuers still prohibit transactions from Cuba, making MasterCard's move largely symbolic so far—but still a notable gesture for international visitors, especially those unaccustomed to Cuba's cash-heavy economy.
Earlier this week, Bloomberg noted that joint-venture hotels are "routine" throughout the country, with 60,000 rooms available. A new container port at Mariel, built by the Brazilian government, created export capacity for a country that exports very little. Similarly—and most importantly, according to the business site—Brazilian President Dilma Rousseff has "gambled that pharmaceutical production and other tightly controlled businesses can thrive" in Cuba. All of these developments, combined with the relaxation of the embargo, seem poised to bring in a new generation of both business and leisure travelers, and they will be looking for high-end and business-class accommodation.
As Hotel Management noted in February, Cuba already has more than 3 million visitors per year from countries throughout the European Union, Canada and other nations. At the time, Steve Joyce, president and CEO of Choice Hotels International, said that "the minute that access to development in Cuba begins, Choice Hotels will be down there in a thoughtful and well-executed manner.” Marriott International CEO Arne Sorenson acknowledged the limitations of the embargo, but said he "looked forward" to opening hotels in Cuba. Other international brands released carefully phrased statements indicating interest, but not specifying any development plans.
As the Wall Street Journal noted, Cuba has a limited number of traditional hotel rooms, posing a challenge to international 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.
But private investment is already underway. Last month, CNBC reported that Thomas Herzfeld, manager of the closed-end Herzfeld Caribbean Basin Fund, is raising money for a private equity fund geared toward direct investment in Cuba that would include hospitality services.
"Back-and-forth commerce (that) aggregates between Florida and Cuba will be a major industry," Herzfeld told the news site. "Tourism certainly. There is a tremendous shortage of hotel rooms in Cuba, which will lead you to look at the cruise lines, because they actually have the most hotel rooms available that could be put into use immediately." The story also noted that as a communist country—"one of the few remaining in the world"—Cuba's government controls nearly 100 percent of the island's businesses and trade. Recently, however, the country has begun permitting individuals to start small businesses such as restaurants, barbershops and clothing stores.
Photo and video courtesy Airbnb.