HAVANA, April 12th Cubans who rent homes to tourists saw the heavens open when Airbnb, an American company that connects guests with hosts renting their homes, offered them the opportunity to use its digital platform.
Everything “worked like clockwork,” says a Cuban hostess, “until they stopped paying me two months ago.” Airbnb now owes her $2,000 and the company has not told her when she can expect payment, she said.
An Airbnb spokeswoman said the company is working to resolve the issue.
“While we are proud the platform has proven to be an effective way to bring significant income directly to the Cuban people, the volume has recently led to our hosts in Cuba experiencing a delay in payouts and we take this matter very seriously,” said María Rodríguez, an Airbnb spokesperson. “We recognize that we need to work to support money getting to Cuban hosts as quickly as possible — consistent with the historical approach to casas particulares — and we are working around the clock on near-term and long-term solutions to ensure our growing host community gets paid quickly and efficiently.”
…WE ARE WORKING AROUND THE CLOCK ON NEAR-TERM AND LONG-TERM SOLUTIONS TO ENSURE OUR GROWING HOST COMMUNITY GETS PAID QUICKLY AND EFFICIENTLY.SPAN
María Rodríguez, Airbnb spokesperson
Airbnb was the first big company to enter Cuba with horns blaring after a thaw in bilateral relations launched by then President Barack Obama in December of 2014.
“Cuba is the fastest-growing country on Airbnb ever in the history of our platform,” Brian Chesky, who traveled to Havana with a business delegation accompanying former the former president said at a Havana press conference in March 2016.
By then, the company — which began operating in Cuba in April 2015 — already had about 4,000 houses listed on its website, which accommodated 10 to 20 percent of all Cuban American travelers to the island, Chesky said.
Rodríguez said that figure has multiplied quickly.
“We have since seen huge growth in demand with more than 19,000 listings across the island,” she said.
So what went wrong?
The problem is linked to the form of payment the company chose to send the money to its Cuban hosts. The U.S. embargo still in effect prohibits most banking transactions between the United States and Cuba. Only two banks, Stonegate Bank of Florida and Banco Popular of Puerto Rico, have issued Mastercard credit cards that can be used on the island but not by Cubans.
U.S. visitors who use Airbnb to rent accommodations, pay for their stay with American credit cards via the website. In order to pay the hosts, Airbnb uses a Miami-based remittance company, VaCuba, to issue the payments, which are converted from dollars to CUC — Cuba’s hard currency — and delivered personally to hosts on the island.
IT ALL STARTED WELL BUT ABOUT TWO MONTHS AGO THEY STOPPED PAYING US. THEY OWE ME $2,000.SPAN
Marta, Cuban host
“It all started well but about two months ago they stopped paying us. Before, the renter would leave and within three to five days, a person would come with the money. They owe me $2,000,” said Marta, a host who manages rental properties for several of her family’s houses in the Miramar neighborhood. She declined to give her full name for fear of retribution.
If the matter is not settled, Marta says, she will be forced to shut down her rental business, “which means that we and the Cuban Americans, who are our main customers, will be affected.”
Marta has a positive opinion of the Airbnb’s platform and sees the advantage it provides for her business. “It’s marvelous. If we used to receive three clients before, we are now busy the 30 days of the month,” she said.
However, she has become increasingly frustrated with the company’s lack of response.
“You try to enter their page [from Cuba] and you cannot talk to a supervisor who can tell you that your money is safe. Airbnb does not show its face,” she said by telephone from Havana.
El Nuevo Herald contacted VaCuba’s main office in Little Havana. A customer service employee said that the only person who could “answer questions from the press was traveling outside the country.”
Rodríguez said that the fast pace of growth of Airbnb units on the island is prompting a “reassessment of the method of payment” but she said she was not able to comment on the options being considered.
Marta’s lack of payment apparently is not the only one.
In the “Community” section of the company website, at least a dozen Cuban hosts have published similar complaints since the beginning of this year. A hostess identified as Xiomara says that VaCuba owes her rental payments for the entire month of March.
THERE ARE ALREADY THREE PAYMENTS OVERDUE AND I FEAR THAT IT WILL CONTINUE TO HAPPEN WITH ALREADY CONFIRMED RESERVATIONS.SPAN
Orlando, host in Holguin
“There are already three payments overdue and I fear that it will continue to happen with already confirmed reservations,” wrote Orlando, another host in Holguin, in western Cuba, while Gabriel said: “To date VaCuba has not made the payment for a total of 14 reservations (between the two apartments that my family and I have in Havana).
“I do not know how much time Airbnb will wait to address this matter,” he added.
The problem is not new, write Ileana and Rolando, a married couple who rent rooms in in the popular beach city of Varadero and who are listed as “super hosts” on the Airbnb platform because of the high quality of their service. They claim to have suffered “a serious delay in receiving payments through the agency VaCuba” at the beginning of last year and now they face a similar situation. “No payments have been received, and so far three more remittances are pending.”
According to company estimates, a host who rents a room in Havana can earn up to $227 a week, almost 10 times the average monthly salary of a state worker. However, hosts must pay monthly taxes — regardless of whether or not they rented their homes as well as a self-employed license fee.
Self-employed workers, known as cuentapropistas, who earn more than $2,000 in the year, for example, must pay 50% in income taxes. According to economist Carmelo Mesa-Lago, the tax burden for Cubans — mostly the self-employed — was 37% of their yearly income in 2015, twice the amount in Latin America, which “induces tax evasion” and the “underreporting of income,” he wrote in his latest book Voices of change.
A Cuban user on the Airbnb website shared an email allegedly sent by VaCuba, in which the company urges him to obtain an AIS debit card issued by Financiera Cimex SA (FINCIMEX), available to Cuban citizens.
VaCuba will then send the payments to that card. However, it is not clear if this transaction would be legal because FINCIMEX is part of the GAESA conglomerate, controlled by the Cuban military. And the Cuban state would have a record of how much money Airbnb has actually paid to each of the Cuban hosts using its services.
“That’s not what we agreed to and I’m not interested in receiving the money through a state office. For me it’s a problem that Airbnb must solve,” Marta said. “They should pay us what they owe.”