Airbnb is opening its home-rental site to Cuba, making it one of the first U.S. businesses to take advantage of recently eased travel and trade restrictions in the island nation.
Starting Thursday, American travelers who obtain a special license from the U.S. government to visit Cuba can book stays at over 1,000 apartment and home rentals Airbnb has listed in the city of Havana, the company said.
The expansion puts Airbnb at the forefront of a wave of U.S. companies planning to open shop in Cuba in the months after President Obama loosened trade restrictions that have limited commerce in the region for decades. The administration’s new policy with Cuba, unveiled last December, is expected to open the country to U.S. banks and telecommunications companies and re-establish scheduled
for thousands of Americans hoping to visit the island, many for the first time.
While Airbnb’s potential profits in Cuba are small compared to many of the 190 other countries where the room-rental service operates, its move into the country shows it can sometimes move more quickly than competitors in the hospitality industry and skirt government regulations they can’t. The U.S. trade embargo with Cuba still makes it difficult for American hotel operators to enter, since they would have to buy or rent physical property and employ full-time staff in the country.
Airbnb said it’s now covered under the U.S. government’s definition of permitted travel services providers, which was broadened under the recent rule changes.
Cuba’s Internet penetration is one of the lowest in the world, with only about 5% of residents having access, according to the White House. So to quickly sign up hundreds of rentals, Airbnb partnered with an existing local network of Cuban residents who rent out their homes and apartments. The bed-and-breakfasts, known locally as “casas particulares,” sprouted up over the past two decades to accommodate a boom in European tourism in the country.
“The shared housing model already existed in Cuba,” said Dan Restrepo, a former advisor to President 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 casas particulares owners. It is contracting local photographers to take photos of their listings. And because credit cards are not widely used in the country, Airbnb is working with a local cash remittance service to pay home owners 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.
In 2012, a Cuban newspaper estimated there are about 5,200 casas particulares operating in the country.
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 are not 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,” Laverty said.
Surging tourism frequently results in local hotels being completely booked, especially during popular events like the Havana Art Biennal in May, Laverty said. He plans to begin recommending Airbnb as an option for individual travelers.
In February, U.S. telecom company IDT said it reached a deal with the Empresa de Telecomunicaciones de Cuba to offer long-distance calls between the U.S. and Cuba. Netflix , MasterCard and American Express have all announced plans to enter the country.
Google chairman Eric Schmidt reportedly visited Cuba last year on a trip to promote a free and open Internet in countries around the world.
Airbnb still does not operate in Sudan, Iran, North Korea, Syria and Crimea because of governmental restrictions, the company said.
-Craig Karmin contributed to this article.