Today, Airbnb was granted authorization to expand its digital lodging service to travelers from around the world.
Airbnb was open only to those Americans traveling on the existing government-sanctioned categories for travel to Cuba. With 4,000 listing in less than twelve months, Cuba is the company’s fastest growing market in the world.
Marriott International announced today that the the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury has approved its application to pursue a business transaction in Cuba.
And yesterday Starwood Hotels & Resorts Worldwide announced it has partnered with several Cuban entities to manage hotels in the island nation. Reports indicate Starwood received its US government approval last week.
The Starwood and Marriott deals, made possible through what appears to be unique approval from the Obama administration, marks the first US hoteliers to operate in Cuba since the 1959 revolution.
Hotels and tourism are vital industries for Cuba. They attract investment, create employment and bring hard currency to the island nation as it struggles to transition its economy from being government-dominated to one that has a much higher participation from the private sector.
Airbnb could be a game changer for Cuba – and the first of many tech companies to directly impact the course of Cuba’s economic trajectory. In hotel terms, Airbnb’s presence is the equivalent of 8 or 10 hotels coming on line within a few months. And this momentum is likely to increase as Cubans realize the economic potential in room renting.
In a traditional sense, Airbnb’s economic impact is relatively simple to measure. Everybody wins. What’s different about Airbnb in Cuba is the social impact. Every peso collected by a Cuban through Airbnb is also a deposit in the bank of that person’s emotional stability. What is such a simple concept – renting a room – contains transformative potential by exposing the homeowner to a rare phenomenon in low-income countries: the prompt seizure of economic opportunity. Inevitably, competition will drive homeowners to invest in their houses using local skilled laborers; employment will grow in diverse sectors as homeowners spend profits locally rather than the profits being remitted to the Cayman Islands-based LP investors of a traditional hotel project.
Now apply the Airbnb model in Cuba to cars (Uber), banking (Paypal), shopping (Amazon), education (Khan Academy), travel (Trip Advisor), communication (WhatsApp), internet search (Google) and the menagerie of companies that make up the new shared economy.