Few geopolitical relationships in history are more fraught with nationalism, retrenchment, and global intrigue than the diplomatic relationship between Cuba and the United States. At the height of the Cuban Missile Crisis, Fidel Castro urged “Comrade” Nikita Khrushchev, the Soviet Premier, to launch a preemptive nuclear attack against the United States .
In his defense, Castro famously claimed that “history will absolve me,” arguing that the Cuban Revolution was a liberating force from de facto colonialism and inescapable economic inequality under the regime of American-backed Fulgencio Batista . Certainly, some humanitarian value was created as a result of the Cuban Revolution: the infant mortality rate in Cuba is lower than in Boston  .
In response to the Cuban Revolution, President Eisenhower in 1960 issued a ban on exports to Cuba . Since Eisenhower’s proclamation, the globally controversial Cuba Trade Embargo has largely remained intact, with the first material changes made under the Obama administration, including lifting certain travel and trade restrictions . It is this complex and antagonistic backdrop in which Airbnb entered Cuba in 2015 .
Airbnb’s mission is to connect the world and enable unique travel experiences. Brian Chesky, co-founder of Airbnb, describes interactions between Cuban hosts and American guests as “person-to-person diplomacy.”  Beyond its rental platform, which provides listings in 191 countries, Airbnb recently launched experience based interactions . Want a salsa lesson from a renowned instructor in Havana? Airbnb makes it happen.
To its core, Airbnb is global, facilitating understanding across cultural boundaries. Political movements that stoke fear of differences and inflame indignation based on racial identities not only serve as risks to growth in Airbnb’s network of hosts, number of renters, and breadth of experience based tours, but also contradict Airbnb’s mission.
According to the World Bank, international tourism as measured by the number of arrivals has grown at a 4.2% annual rate since 1995 . A once resilient tailwind is at risk of dissipating in a world of travel bans and demands to standoff immigration.
Airbnb’s value chain is relatively simple. Downstream orders from vacationers are automated, upstream suppliers consist of a single constituency, homeowners, and payments are electronic. Strategically, Airbnb wins on the basis of its user interface, speed to market, and ultimately strong network effects. Adapting this delivery model to Cuba, where only 5% of the population has access to an open internet connection, transactions are in cash, and exports from are the U.S. are only tepidly given the green light, has required flexibility in Airbnb’s supply chain.
For safe measure, Airbnb clarifies even the most mundane operational decisions – for instance, can photos taken by a Cuban be posted on its website – with the U.S. government . To source a stable supply of hosts, Airbnb has built software workarounds for web access and tapped into a network of rental homes, or casas particulares, that have been available since the fall of the Soviet Union . Home listings are managed from internet cafes. Transferring money to a cash-only island nation is done by third-party cash transfer services, oftentimes with bags of cash left on doorsteps .
Beyond near-term operational complexities, Airbnb has an eye on driving long-term demand. Airbnb is an activist for ending discrimination and creating “a world of belonging,” addressing these challenges by providing toolkits on unconscious biases to its members and creating campaigns such as its #OneLessStranger initiative to highlight how interconnected the world is .
Looking forward, Airbnb’s path in Cuba is mired in political tension. In early November, the Trump administration unraveled Obama era rapprochement policies with Cuba by blocking most individual visits, while allowing U.S. companies with existing contracts to continue to operate .
Airbnb should double-down on Cuba. According to Gallup, 59% of Americans favor ending the Cuba Trade Embargo . To an extent, Airbnb controls its own destiny. Travel to Cuba by Americans increased by 77% in 2015 . By fighting protectionist trade policies through promoting global connectedness, Airbnb can prompt political change by creating a free market for vacation travel.
Airbnb should deepen network effects by launching training programs that educate Cuban hosts on best practices for pleasing tourists. While U.S. tourism is on hold, Cuba as a destination should be marketed to other geographies.
The objective should be to entrench Airbnb in Cuba. The economics for tourists and hosts must outweigh the politics. The U.S. prides itself on evangelizing democracy. The average Cuban host on Airbnb makes $250 per booking, the average Cuban salary is $23 per month . Airbnb should emphasize its nation building effects to government officials.
This pattern is familiar. Disintermediation happens in an instant. Governments react slowly. Should Airbnb’s humanitarian mission continue to push the envelope? Can Airbnb dismantle the last remnants of an Iron Curtain that governments continue to stumble over? (Word Count 796)
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