Online Travel, Other Tech Giants Set Sights On Cuba
As President Obama stands beside Cuban President Raul Castro in Havana and brokers historic talks to thaw relations between the two countries, online travel giants and other Silicon Valley titans have set their sights on building businesses on the island nation. The $8.4 billion tourism industry is likely to swell once Washington allows general tourism to the island nation. For now, a license from the Treasury Department is required for legal travel to Cuba, but the online travel kings have been quick to strike deals to build sales to that nation. Still, online travel firms shouldn’t expect any big returns on their efforts for three to five years, says Douglas Quinby, an analyst with travel research firm Phocuswright. “But once all the ducks are lined up, I think you’re going to see a lot of interest for U.S. travelers,” Quinby told IBD. “It’s a huge Caribbean destination, it’s got great beaches and sun.” Online travel giant Priceline ( PCLN ), via its Booking.com platform, already is setting up shop in Havana and allowing U.S. citizens to reserve and pay for rooms at Cuban and foreign-owned hotels. “Members of our leadership spent many weeks working hand in hand with the Cuban government and tourism authorities, hotel partners, and banks to ensure that when we launch a few weeks from now our customers will experience the secure and seamless service they’ve come to expect from Booking.com,” Todd Dunlap, managing director of Booking.com Americas, told IBD via email. Expedia ( EXPE ) is working on getting travel to Cuba online as well — though it did not share a timetable or a specific date that bookings could begin. “We currently have a team working across multiple channels to help enable U.S.-to-Cuba travel, taking every step to ensure that the solutions align with the laws governing travel between the countries,” company spokeswoman Sarah Gavin said in an emailed statement. Privately held Airbnb has been operating in Cuba for a year, and is available to U.S. citizens in Cuba. The San Francisco-based firm lets travelers rent homes, rooms in homes and apartments. According to an Airbnb blog post , U.S. visits to Cuba rose 77% in 2015, to 161,000. The company says it’s working closely with the Cuban government. TripAdvisor ( TRIP ) spokeswoman Julie Cassetina told IBD via email that the company is “now displaying hotel metasearch for Cuban hotels” on its website, but she declined to make executives available for an interview. Silicon Valley Heads To Havana Outside of the online travel agency kings, the tech contingent included IBD Leaderboard stock PayPal ( PYPL ). In a blog post Sunday, PayPal CEO Dan Shulman outlined his case for targeting Cuba. The major cash cow for the firm is likely to be in assisting Cubans who receive money from sources in the U.S., an influx which at the moment, according to the blog , accounts for $2 billion, or 3%, of the Cuban economy each year. It’s a chance for PayPal to expand the reach of its Xoom subsidiary, which handles international transfers. PayPal bought Xoom for $890 million in July 2015. The blog also makes the pitch that PayPal plans to find ways to attract Cuban small businesses — which at the moment are mostly not set up to process credit and debit cards. Privately held Stripe, which competes with PayPal payments-processing subsidiary Braintree, also made the trip to Cuba. Stripe said in a blog that it would start offering Cuban businesses the ability to set up bank accounts and incorporate in the U.S. On the trip, President Obama said Alphabet ( GOOGL )-owned Google would try to help ensure that Cubans have access to broadband Internet, which remains scarce, especially outside of large cities. “We know, from the experience of many countries around the world, that new technologies and improved internet access can help people in their daily lives, provide new information and experiences, and help harness a country’s creativity and ingenuity,” Brett Perlmutter, the Cuba lead for Google Access, wrote in a blog post Monday. “We hope to have the chance to offer more services to the Cuban people in the future.” Xerox ( XRX ) CEO Ursula Burns also attended the trip in a fact-finding capacity. “Recent changes in U.S. regulations may afford new commercial opportunities in Cuba,” Burns told IBD in an emailed statement, “but the parameters of those opportunities are not always obvious. The U.S. government has worked hard to describe what the recent changes mean. I think part of my job on this trip is to evaluate what they mean in light of the economic realities here in Cuba.”