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Multiple factors crimping the economy here |
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English speakers in Costa Rica are in the midst of tough economic times. But their economic problems may be secondary to what is turning out to be a lean tourism season. The defaults by the Luis Enrique Villalobos Camacho and Savings Unlimited
investment operations are one reason North Americans are broke and unhappy.
But tourism also seems to be below expectations, and the tourists who are
here seem to be very careful in spending money.
disrupts tourism BELOW! War fears are a major effect, and many business people are bracing for a hot war between the United States and Iraq. They feel that such a war will disrupt even more the lackluster tourist season. A struggling U.S. economy and unemployment are other concerns. The problem ranges up from Golfito and the Osa Peninsula where a tourism official said foreign visitors were about 20 percent of normal. On the Caribbean, some hospitality businesses still are trying to rebuild after the heavy storms of late November and early December. In addition to physical damage, the storms had a strongly negative public relations effect. Residents who attended the week-long Puntarenas carnival that ended Sunday said they were surprised by the absence of many foreign tourists. The Pacific beach communities also seem to be feeling the slowdown. Even in San José where hotel bookings seem solid, some nightspot owners who cater to North Americans report their income is off at least 15 percent. And that is not using the shaky 2001-2002 tourism year as a base. The restaurant and bar owners are talking about the average over a number of years. Upscale restaurant owners in heavily English-speaking Escazú are singing the blues, and some have their operations for sale. Investors with the Villalobos firm cite the economy as one reason Costa Rican officials should drop investigations and allow him to return to business. He closed his office and went into hiding Oct. 14. However, some observers of the economic scene think that investors overestimate the impact of the Villalobos 3 percent per month interest payments. Most investors rolled the interest over to get more, they say. So the money was just a bookkeeping entry. Monthly interest for investors, based on an average balance of about $100,000 would be $19.2 million a month. Some say the monthly interest was as high as $30 million. Some investors took their payments as cash during monthly visits to the Mall San Pedro location. But the economic impact is hard to determine without knowing how much was rolled over, how much was sent out of the country and how much actually was spent by investors here. In addition to San José, the failure of the two investment operations (Savings Unlimited closed down Nov. 22), has hit pockets of North Americans all over the country. From the beach communities of Flamingo, Tamarindo, Nosara, Jacó, Quepos and Manuel Antonio to the Arenal area to Pérez Zeledón, concentrations of foreigners are not spending the way they did in the past. And tourist numbers are down. Something stressful is happening with upscale restaurants that cater to North Americans. Some host just a handful of customers each night. Others are empty. So are some elite hotel dining rooms. Restaurant owners and workers in Escazú, where a large number of ex-pats live, have reported falling customer numbers in the months since the collapse of the ill-fated investment operations. From high-end to average-priced restaurants, the reverberations of the investment collapses, which had a largely North American |
and European clientele, and the economic downturn have been felt across the whole cross-section of the restaurant trade. But declining tourism also may be responsible. Possibly one of the most affected restaurants is Café de Artistas. The owner there, Bill Hill, said 50 percent of the café’s customers were from the ex-pat community, but since the investment collapses, trade from ex-pats has declined greatly. He has extended hours to compete. Professionals in the area have voiced concerns over the reliance of businesses on ex-pats. Joanne Loewen, a local graphic designer, said that a lot of businesses are going to have to change their emphasis. She said many places, not just restaurants, relied too much on customers from the foreign resident community, dominated by North Americans. Mrs. Loewen added that it isn’t just the local business owners that suffer from this downturn in the local economy, but the employees of the restaurants, many of whom are Costa Rican and Nicaraguan. She also spoke of the situation with the more expensive restaurants. "Higher-end places have a lower occupancy rate, but they’re not dying," she said. Mrs. Loewen designs advertisements and logos for many of the affected businesses in Escazú. Other restaurants and bars have been affected, too. Lofty Tweedale, owner of El Ché in San Rafael de Escazú, said businesses are definitely affected by the investment collapses, including his own. However, he added that businesses must constantly evolve to external forces. Edwin López, a waiter at Restaurante Cerutti, also in San Rafael de Escazú, said that although business there remains steady, the restaurant has noticed that some of its ex-pat clients have not returned in a while. The restaurant was empty Saturday night Jan. 25, when a reporter dropped by. Tony Roma’s, a U.S. restaurant franchise with a location in Escazú, reports that its business is "so, so." But this isn’t necessarily as a result of the investment collapses, said Carlos Sovrino, the restaurant’s service manager. Sovrino said that the restaurant’s slowdown in business is due to a high level of competition. "The problem here is [that] there [are] too much bars," he said. He added that the slowdown wouldn’t force the business to close. Sovrino said that he has noticed a few of the restaurant’s North American regulars drop off. But, he said, only 20 to 25 percent of the restaurant’s customers are North American anyway. Neighboring TGI Fridays, also a U.S. franchise, reports business to be normal, according to the restaurants manager. The restaurant was visibly busy when the manager was contacted. Other businesses in Escazú have reportedly incurred drops in ex-pat customer numbers, including, among others, dry cleaning services. Tourist numbers through October show less than a 2 percent decline in North Americans. But current numbers are not yet available. Most of the concern about war came after October. |
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American-Tico-owned firm cxcc COMPLETE AUTO SERVICE DOOR TO DOOR Commercial and Personal Import and Export xxx Perry Edwards {Amer} Zinnia Stewart {CR} Port Limon Agency (bonded & licensed) (506) 758-2062/2022 |
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