Los Yoses Bar and Restaurant in Nicoya closed its business on Sunday with several debts, according to its owner, Zorayda Oporta. The decision was made after the Ministry of Health ordered all bars, clubs and casinos to close due to not complying with preventive measures due to the spread of the new coronavirus (COVID-19).
“We decided to close the bar and the restaurant, which can still function, for several reasons. First, out of solidarity. Also because we have people in our family at high risk for the virus, so we are afraid of catching it. Also because sales fell a lot, so expenses were more than profits,” she related.
To survive the next few weeks, she created an express service for the food that she usually sold at the restaurant. While her husband delivers food to houses, workplaces and other locations, she is focused on the kitchen.
It was the first thing that occurred to us, because we don’t have a lot of savings and we need to keep going. We are trying to reinvent the business. He won’t be a waiter and a cashier now but a driver instead. That’s how we’re doing it,” she affirmed.
Reinventing oneself is exactly the main recommendation for small to mid-size enterprises (SMEs) from Minister of Economic Affairs Victoria Hernandez.
“A minister who had a small restaurant and who knows about crisis is telling you this: We have to reinvent ourselves. SMEs have to form alliances with other businesses and start offering packages. Also express services, home visits, for example. Be revamping all the time and creating databases of their own clients. We must remember that this is not a vacation, but a forced recess,” Hernandez told The Voice.
Losses Will Be Heavy
According to the latest employment survey by the National Institute of Surveys and Censuses (INEC), the main sources of employment in Guanacaste are hotels, restaurants and wholesale and retail distributors of various products.
The Ministry of Economic Affairs has not made complete projections on economic losses due to the virus arriving in the country. However, Hernandez anticipates that they will be “very heavy.”
It’s clear to us that uanacaste is eminently a tourist area, which means that if we close the borders for 26 days, the matter becomes difficult,” Hernandez affirmed.
According to Oporta, owner of the Los Yoses bar, her business has losses of between ¢150,000 and ¢200,000 (about $260 to $360) per day.
The figures are similar for the Canela Azul restaurant and café, which went from getting 40 to 50 orders daily just for lunch to only 15 services delivered all day on Monday.
It’s a pretty ugly situation, because the 50% reduction did not have much effect, and people were no longer coming. We are advertising everywhere for them to buy home delivery from us or to just buy to go. So we help each other,” related Daisy Barrantes, owner of the restaurant.
For its part, the Alfaro transportation company, which makes about 11 interprovincial trips a day from Guanacaste to San Jose, has also had low customer turnout in the first week since the government announced measures against the virus.
According to one of its representatives, Gerardo Alfaro, there are at least 25% less clients in all of their trips, which in numbers equates to between ¢500,000 and a million colones (about $890 and $1785) less daily. Alfaro affirms that in the next few days, those numbers will increase.
“The Santa Cruz and Nicoya route schedules are being unified due to low demand. We are giving several of the drivers vacations, taking advantage of the reduced schedules. We are [also] taking measures to clean all the routes daily,” he stated.
The company has not yet devised a way to offset the losses.
Days ago, the executive branch proposed a three-month moratorium on the payment of value-added taxes, a reduction in the monetary policy rate to reduce credit, and insurance so that the tourism industry can deal with the quarantines.
The Minister of Economic Affairs emphasized that, by closing locations and reducing the capacity of others, “no business is capable of receiving a fixed income.” Therefore, the idea is to remove the fixed expense of tax payments, which currently generates more expenses for companies in crisis.
That is also one of the biggest concerns for Jose Rodriguez, owner of the Guanathletics fitness center in Nicoya.
Although there are not currently preventive measures or closures for businesses related to physical fitness, Rodriguez closed his location as of Saturday until further notice.
I closed [the gym] because I feel that the training center promotes health and [keeping it open] would go against what we promote,” he stated.
One of his biggest concerns is paying his tax and payroll obligations since he figures that he will not receive income for a considerable period of time.
“We are all making a greater effort to combat this virus. But the debts are there. The payments have to be made. Since this was so sudden, we did not have a specific plan or savings fund, so we have to see how we come up with it,” Rodriguez related.
Meanwhile, the gym will offer routines through the gym’s app so its clients can do their routines from home. Likewise, Rodriguez explained that when the location opens again, he will offer several promotions to attract new members and to recover lost profits.
The consulting and advisory company for SMEs in Costa Rica highlights creating new promotions to attract the public, home delivery service and using social networks as catalogs of the company’s products as key exercises.
In the coming days, the Ministry of Economic Affairs will distribute a manual of concepts and advice for SMEs during the crisis.
How to Help Business?
All of the SME owners interviewed concluded that the best way to support their businesses is to use online services to buy their home delivery services.
“I cannot ask for anything directly, because we all have needs. But as far as possible, very personal, if they could continue with their normal monthly payment it would be something we would greatly appreciate,” said Jose Rodriguez, from Guanathletics.
The Minister of Economic Affairs stated that in addition to using online services, it is also important “more than ever” to give feedback to businesses. “Perhaps there is an idea that could work for a restaurant, which had not occurred to them but it had to me as a client. So telling them about the idea is already a great contribution,” she emphasized.
Another proposal that she offered is to make purchases for future dates or buy gift cards, if they are available. “Anything that helps businesses make a profit,” she said.
If you wish to place orders with any of the businesses consulted for this article, contact them at the following numbers:
Canela Azul Cafe: 8834-6143
Los Yoses Restaurant: 2685-5674