Google and Airbnb expand in Cuba with Obama's historic visit
Google is to expand Internet access in Cuba as relations thaw with the US. But one expert warns American companies like Airbnb could be part of a 'virtual land grab'.
As President Barack Obama becomes the first US president to set foot in Cuba in half a century, he revealed that Google will expand Internet access on the island. But as US companies including Airbnb and Booking.com take advantage of friendlier relations between the two countries, experts have expressed concern of a "virtual land grab" by US companies.
The US has imposed trade and travel restrictions since 1962 against the communist-governed Caribbean island. But from 2008, presidents Obama and George W. Bush have overseen a thawing in relations, and on Sunday, President Obama touched down on the island for talks with Cuban leader Raul Castro. Obama's visit is the first by a US president since before the communist revolution of 1959.
Obama revealed that during his visit he would announce that Google is making Wi-Fi and broadband more widely available in Cuba. The company's Google Fiber broadband network is currently available in several parts of the US.
In the climate of thawing relations, US companies are scrambling to be a part of Cuba's tourism industry, already a major source of revenue for the island. Although it's technically illegal for them to travel to Cuba except in specific circumstances, 161,000 Americans were among the 3.5 million tourists from all over the world who visited Cuba last year.
US President Barack Obama and his family arrive at Jose Marti Airport in Havana, Cuba.
Commercial flights from the US to Cuba will resume in the fall, and US hotel chain Starwood plans to refurbish three hotels on the island. Ticket-booking website Booking.com, owned by Priceline, will in coming weeks begin allowing US customers to book vacations in Havana and plans to sign deals with existing hotels and tourism countries.
For the past year, Airbnb has been the only major US service allowing Americans to book accommodation in Cuba. Beginning in April the company, which allows homeowners to rent their rooms or homes to guests, will also allow people from other countries to book a place in Cuba.
Although it will provide an opportunity for ordinary people to earn money by renting out their space, Airbnb has been criticised for playing a part in housing problems in other countries. A recent report by industry observers Tom Slee and Murray Cox found that developers renting out multiple apartments in places such as New York and London drive up prices and keep housing off the market for permanent residents.
Cox has previously stayed in Cuba in accommodation rented out by citizens, known as casa particulares. "As someone that has travelled in Cuba prior to Airbnb," he said Monday, "it's exciting to hear that the United States is further dismantling their economic and travel restrictions, and I hope that this will provide new opportunities for the Cuban economy and their people.
"However, as tourism demand increases and restrictions are lifted on Airbnb's ability to operate in Cuba, my concern about Airbnb's business model in other cities around the world also applies to Cuba," he said. Those concerns include "the commercialization of residential housing and its affect on communities."
Cox worries that "Airbnb might be party to one of the first virtual 'land grabs' by an American company in Cuba, concentrating profits in the hands of the most wealthy and connected Cubans, offshoring commissions, and profoundly disrupting residential housing in Cuba (which for 50 years has been mostly social housing)."
The Internet is still relatively new and limited to Cubans. Internet access is limited and relatively expensive under state-owned telecoms monopoly Empresa de Telecomunicaciones de Cuba (ETECSA). According to 2013 statistics from the International Telecommunication Union, only 25.7 percent of Cuba's 11 million-strong population use the Internet and just 12.7 percent of households have a computer at home. Broadband access at home can cost around $40 a month.