Although President Obama on arrival in communist Cuba said he was “confident” the U.S. embargo would end and the two nations would normalize trade, the only immediate opportunity seems to be Airbnb, which is already offering thousands of rentals.
The 11 million people in the Cuba “workers’ paradise” are absolutely flat broke. The average worker’s salary is just $24 a month. Despite having some of the most fertile farmland on the planet and an excellent growing season, 80% of Cuba’s food must be imported at a cost of $2 billion a year to prevent the workers from starving.
After the Soviet Union collapsed, Cuba opened the nation to unlimited remittances in 1993. “Roughly one-third of Cubans receive money from abroad,” said Jorge Duany, director of the Cuban Research Institute at Florida International University in Miami.
Annual remittances from the U.S. to Cuban family members average about $5.1 billion, or 8% of GDP. That equals more than the $4.9 billion revenue from Cuba’s four largest industries combined — including tourism and exports of sugar, nickel and medications.
Among the dozen business leaders that officially accompanied Obama were Airbnb co-founder Brian Chesky, Major League Baseball Commissioner Rob Manfred, Marriott CEO Arne Sorenson, and Starwood Hotels general counsel Ken Siegel.
The Presidential visit included a reception at a local Havana brewery, with Cuban political and civil leaders as well as local entrepreneurs hoping to strike business deals.
Starwood Hotels announced that it had closed a deal to manage three hotels in Havana; Marriott Hotels said the Treasury Department had approved its application to “pursue business opportunities” in the “hospitality sector”; and Google announced it had secured a deal to increase wireless and broadband Internet access on the island. But these relationships will take time and money before they create revenue.
Yet in a demonstration of viral speed to market, Airbnb for travel effective April 2 began booking travelers from around the world into overnight stays that range from $10 for a hostel bunk bed, to $48 for a room at the five star Habitación frente al Malecón hotel, and to $80 for an opulent Colonial Spanish Mansion.
Airbnb launched its Cuban operations in April 2014, just four months after the Obama administration revealed it had begun restoring diplomatic relations with Cuba. The company began operations on April 1, 2015 and booked over 13,000 guests in 2015.
In 2015, Cuba saw a 17 percent increase for in-bound travel, a 77 percent increase in U.S. Visas, and an increase in hotel occupancy rates to 80 percent in city of Havana and the Veradero beach.
Airbnb’s daily listings of Cuban houses for rent has jumped from 1,000 in 2015 to over 4,000 in 40 towns and cities across Cuba in 2016. The average revenue for a Cuban booking is $250 — over 10 times the average monthly wage.
According to Reuters, California was the top U.S. state of origin for travelers to Cuba last year, with 27.8 percent of all American visitors.
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