Airbnb Proves To Be A Formidable Rival For Hotels Looking To Expand To Cuba

Image courtesy of Adam Fagen

Despite Starwood Hotels & Resorts inking a deal in March that will allow it to become the first hotel company offering rooms in Cuba, traditional lodging companies are struggling to play catch up with Airbnb, which began offering rooms for rent on the island nation last year.

Airbnb announced in April 2015 that it already had more than 1,000 rental listings in the country just four months after President Obama announced that he would begin normalizing relations with Cuba.

More than a year later, the online-home rental marketplace has increased its listings to include more than 4,000 properties, the Washington Post reports, becoming the company’s fastest growing market.

That exponential growth has also created a formidable rival for hoteliers looking to get a foothold in the island nation.

“The typical scenario has been the opposite, where hotel companies are the established ones, then Airbnb comes later,” Sean Hennessey, chief executive of Lodging Advisors, a market analytics firm in New York, tells the Post. “In Cuba, having the first-mover advantage, as we call it, is a big plus in Airbnb’s favor.”

The reverse of the traditional sequence of events was made possible in part because Airbnb doesn’t rely on infrastructure in the same way hotels do.

For example, the Post reports that while Cuba provides a big opportunity for hotels, uncertainty related to the country’s business policies, infrastructure capabilities, and economic embargoes have hindered their entrance into the country.

“Hotel capacity in Cuba simply has no way to keep up with demand, so Airbnb is the winner,” Jodi Hanson Bond, president of the U.S.-Cuba Business Council at the U.S. Chamber of Commerce, said. “To Airbnb’s credit, they were poised with a platform that could capture the existing need.”

In fact, Airbnb, which relies on individuals renting their own homes, was able to benefit from an existing state-run program, called Casas Particulares. When Airbnb opened for business in Cuba, the company had a ready-made network of licensed and willing homeowners looking to make money by renting their residences.

Additionally, travel analysts say that those most likely to travel to Cuba fit the Airbnb mold: young, adventure-seeking travelers.

Despite Airbnb’s large presence in Cuba, analysts say there is plenty of room for U.S.-based hotel chains to build and manage properties on the island.

Among the hurdles U.S. hotels face in Cuba: A booming Airbnb presence [The Washington Post]

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