August 14: The US Embassy reopens in Havana – airbnb has great B&Bs for you!

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 Cuba_USEmbassy_Opening_150815WSJ Editor, Glen Hall; Photo courtesy Pablo Martinez Monisavais/Press Pool

How airbnb, a Value Innovation company, launched in Cuba (basically an all cash economy, with essentially no internet or credit cards)

We are sharing excerpts from Sarah Kessler’s tremendous Fast Company article and some great photos:

“Cuba runs on cash and almost no one has easy access to the Internet. But airbnb nevertheless found a way to beat U.S. hotels to the market with 1,000 Bed and Breakfasts with rooms starting at $20/night.

Don’t know much about Cuba?  Airbnb’s recent announcement that it has begun booking rooms there sounds pretty unremarkable. After all, airbnb operates in more than 190 countries, and its offerings are as diverse as they are plentiful. In the “castles” category alone, there are more than 600 possibilities. Cuba is hardly its most exotic locale.


Lisette Poole, courtesy of AirBnb

But consider this: Cuba has only about a 5% open Internet penetration rate, or access to Internet not controlled by the government. And its economy still runs almost entirely on cash.  How did airbnb, a digitally driven startup, launch in a country with 1,000 hosts where most people have no daily Internet access and no bank account but do have great old US cars, many of them classics.


Lisette Poole, courtesy of AirBnb

Cuba_USA_August14_Car-1_150814Lisette Poole, courtesy of AirBnb

Cuba_Cars_Chevy_BelAir_Photo_1508151956 Chevrolet Bel Air 2 door hardtop: Courtesy

Cuba_1958_Buick_Series_700_ Limited_1508151958 Buick Series 700 Limited Convertible:  Courtesy

The answer to that question starts in 1997, according to Ted Henken, a professor at Baruch College who wrote a book about entrepreneurship in Cuba.

That’s when Cuba officially began regulating the industry of bed and breakfasts that had popped up after the country legalized self-employment in the early 90s. Bed and breakfasts in Cuba have marketed themselves mostly by word of mouth.  The government also provides decals so that travelers can locate them after they have arrived in Cuba, and has made recruiting customers for the Bed and Breakfasts (B&Bs) a licensed profession.


Lists of B&Bs have found their way online. Given that few Cubans have access to the Internet in their homes, many B&Bs use middlemen with Internet access to communicate with future guests. “Like an Internet cafe for hosting,” says Molly Turner, airbnb’s global head of civic partnerships.  airbnb taught these middlemen how to use the website, and helped them add information. “Maybe they didn’t have high-quality photographs in their homes,” airbnb’s Turner says. “Maybe their availability was written on paper and not kept online anywhere. Our team did a lot of work behind the scenes talking to hosts and making sure that the information was up to date and current.”

In December 2014 President Obama ordered the restoration of diplomatic relations with Cuba, including removing some travel restrictions.

airbnb had previously blocked would-be Cuban hosts from listing on its site but it was about to become legal for them to do so. We went on line and this is what we found on airbnb’s website on August 15:  There were >1,000 listings, the average price/night was $55 and the lowest was $20.

Cuba_Airbnb_website_150815Here are two more examples from Sarah Kessler’s article.  They are drop dead gorgeous!:


Photos: Lisette Poole, courtesy of AirBnb

The hurdles remaining are still not small:  Very few Cubans having a bank account. “It’s not just that people prefer cash,” says Henken, “It’s almost the only way. People don’t trust anything else, at least not yet.”

Henken says,”What airbnb is doing is formalizing, monetizing, and really announcing B&Bs.”

Keeping it legal is tricky at this point. airbnb’s Turner says she “gut checked everything” with the U.S. government. Could Airbnb hire a Cuban photographer? (yes). Could it publish photos taken by a Cuban photographer on the website? (yes). Could it book travel for people outside of the United States to Cuba? (no).

This unconventional  business model is enabling Airbnb to get a foot in the door in Cuba, which, with the re-opening of the US Embassy, is surely poised to become a much more popular tourist destination in the coming years.

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