Vacation rental site Airbnb has announced that over 1,000 private houses in Cuba now appear in the company's list of rental properties, which spans more than 190 countries.
“For the first time in decades, licensed American travelers will have the chance to experience authentic Cuban hospitality at homes across the island,” says the company on its blog.
Airbnb defines itself as “a community marketplace that connects people with spaces available in their homes with others learning for a place to stay.” This way, guests and hosts engage in personal relationships with people from all over the world. By the time founders Brian Chesky and Joe Gebbia came up with the idea for the site in 2007, primarily because they needed help paying their rent in San Francisco, California, Cubans had already been renting out rooms in their homes for more than two decades.
“Hospitality isn’t a commodity in Havana —it’s a way of life. Cubans have been welcoming visitors into their homes for decades,” Airbnb says.
These are the friendly faces of Cuba ready to share their world with our Airbnb community: https://t.co/0BYGbdsxMw
— Airbnb (@Airbnb) abril 2, 2015
The start of the economic crisis in 1990 in Cuba, following the collapse of the so-called socialist camp, accelerated the search for individual solutions for obtaining additional sources of income. In 1993, a decree was issued authorizing self-employment — or private initiatives — in over 55 activities, but it was not until 1997 that leasing rooms was permitted as a response to the difficult housing situation in Havana, and as an alternative to gaining foreign currency from tourism.
In 2010, the Cuban government sponsored new measures to strengthen self-employment as an alternative to employment in the state sector. As of March 2014, almost 30,000 Cubans were licensed to practice this activity, and at least 10,000 were located in Havana.
How would Airbnb work in Cuba?
Any citizen can list his or her property on Airbnb. However, the terms and conditions for hosts clearly state that they must comply with current legislation in their respective countries regarding zoning and regulations on renting out residential or other properties. Additionally, they must take into account the tax requirements, rules and regulations that may apply to any accommodation, including obtaining all required permits, licenses, and registrations.
In the case of Cuba, Legislative Decree 184 of 2011 states that tenants must pay a monthly tax of 150 Cuban convertible pesos (CUC), roughly equivalent to 150 US dollars, for renting a room to foreigners, regardless of whether they manage to rent it or not during this period. In the event that more than one room is rented, the tax increases by 75 CUC for each additional room.
After Law 113 of the tax system went into effect, self-employed workers that perform acts of leasing homes, rooms, or spaces pay a minimum monthly fee of 30 CUC for each room, and can deduct up to 20% of their revenue for tax payments on personal income.
One of the basic problems that interested parties will find is the limited Internet access on the island. The latest statistics from the National Bureau of Statistics and Information of Cuba reflect that in 2013, only 26% of the Cuban population had access to Internet services or a home network, which provides email and allows for the use of websites located in the country.
Nonetheless, unlike streaming video provider Netflix, which requires a real-time connection to use the service, homeowners would be able to use alternatives such as hiring a third party to review reservations and keep rent calendars up to date.
In this regard, Cuban journalist and blogger Javier Ortiz told Global Voices:
Llevo varios meses buscando sitios web para anunciar mi casa. Me he inscrito en más diez, pero hasta ahora solo uno de ellos funciona, y me cobra una comisión del 20%. En cuanto me enteré que existía algo llamado Airbnb y que estaba abierto a Cuba, entré y publiqué los datos de mi casa. Quiero aprovechar la primera avalancha de visitantes estadounidenses que vendrán e Internet es una herramienta clave en ese propósito.
For several months, I have been looking for websites to advertise my house. I've registered on more than ten, but as of now only one of them worked and they charged me a 20% commission. As soon as I found out that something called Airbnb existed and was open to Cuba, I went on and posted the information for my house. I want to take advantage of the first flood of US visitors that will come here and the Internet is a key tool for that purpose.
How will Airbnb process payments for reservations made by US citizens?
In Airbnb's payment system, guests pay the company to book accommodations and the company makes this money available to the hosts 24 hours after the guests’ arrival.
“This way, both parties remain protected by the terms and conditions, the cancellation policies, the reimbursement policy for the guest, and other protective measures,” the company explains.
To cover the costs of running the system, Airbnb applies a series of service fees for each transaction, as well as taxes determined by the authorities in each location (such as the value-added tax, for example).
The average price of rooms in Cuba is currently around 40 US dollars.
Airbnb hired a money remitter in the United States to make the payments in their name. The company chose VaCuba, a corporation based in Florida that specializes in sending cash and gifts to families in Cuba. The agency has over 45 years of experience and also offers ticket and consular services, and charges cell phones.
Where are the properties promoted by Airbnb in Cuba?
To date, most of the properties are in Havana, with over 600 homes, followed by Pinar del Río, Trinidad, and Cienfuegos. The average price for a room in Havana hovers around 51 CUC, and is approximately 30 CUC in the rest of the locations. One of the areas most frequently visited by tourists is the beach in Varadero, located in the province of Matanzas, where rooms tend to cost an average of 45 CUC.
A travel site reports that half of the rentals are offered by five people:
I searched around on the site to see about houses that could accommodate my extended family and one of the hits was from a man who was listing 32 houses.
It seems that there are relatively few brokers who are acting as middle men between renters and owners. The brokers speak multiple languages and have email addresses. I wonder what their commissions are? Will they be superfluous if Cuba gets better connectivity? Room/home rental is on the list of jobs eligible for self employment:
Evidently, that includes brokers as well as property owners.