Trumped: Cuba’s short term property rental market 2017-2018

In July of 2017 President Trump announced with much fanfare a new policy towards Cuba. This was following the Obama administrations “thaw” in Cuban-American bilateral relations, which had lead to a noticable rise in Americas visiting the island. Then more bad news for the Cuban tourism industry:

All of this together had a noticable impact on the Cuban tourism sector. Official Cuban statistics show that tourism numbers are going up. This year there were a record number of visits. However, the truth is much more nuanced. Tourists flying in to Cuba actually decreased by 6 percent. There was a strong rise in cruise ship passengers (48%), however the methodology of counting each disembarcation of a passenger as an extra visit might inflate tourism numbers. Moreover, cruise ship passengers spend less, particularly on acccommodation (they sleep on the boat).

Having helped private Cuban property owners sell their properties online for the past few years, we have data on the impact of the changes in the past few years. We use our data to show:

Data source: I help manage a wide portfolio of Cuban properties. The data comes from them. Our data is not a representative sample, but as far as we can tell based on market conversations they are not too atypical.

Effect of Trump changes

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Donald Trump announced his changes in policy, which ostentibly seeked to ensure that the Cuban government get less of a share of the rise in American tourism, and the Cuban public get more. In practice little changed, but the media fanfare that accompanied it had a noticable impact on the amount of US visitors going to the island. Funnily enough, the day of the announcement was one of the days we got the most bookings from the US though.

The loss of US visitors was painful for Cuban property owners, not only because they represented a significant volume in terms of bookings, but also in terms of sales. In other words, American tourists spend significantly more than Europeans.

Airbnb Market Share Loss

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The biggest development in 2018 has been the market entry of Booking.com, Expedia and other players. This is a few years after Airbnb had been enjoying a quasi-monopoly in Cuba. Airbnb was strongly affected by the Trump announcement as they have a strong base of customers in the USA, losing significant volume in sales. Booking.com has been steadily growing since entering the market to become our main OTA.

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