Data from the Nicaraguan National Chamber of Tourism confirms 62,000 lay-offs in 2018, with the impact being felt in the quality of services offered.
The crisis of continued violence and lawlessness is suffocating tourism. Hotels, restaurants and rental homes lie empty while more businesses close.
By Maynor Salazar (Confidencial)
HAVANA TIMES – The Hotel Mogollon is empty. A business that seemed headed for successful development in the port zone of Corinto, in Chinandega, is having its worst season. The tourists have disappeared, nobody wants to reserve rooms. Neither the tranquility nor the comfort of the hotel, a few steps away from the ocean, have managed to reconquer the hearts of customers.
Last year, before the repression against April’s peaceful rebellion, all the rooms in the Hotel Mogollon were filled. The phones wouldn’t stop ringing. The owner was expecting good profits. Nevertheless, a few days afterwards the government ordered the violent repression of the Nicaraguan people who came out on the streets to demand the resignation of Daniel Ortega. The tourists disappeared.
“Since April 18, 2018, the tourists stopped coming. The few who do come only stay two days, because they’re people who come to work at the port. Internal tourists aren’t coming to Corinto anymore,” stated Arturo Mogollon, owner of this hotel.
The Nicaraguan National Chamber of Tourism (Canatur) issued a report documenting the impact of the 2018 crisis on the tourist industry. According to the statistics in this document, the financial blow to these companies translates into a loss of 440 million dollars in comparison with 2017. With respect to the goal that had been set for 2018, they perceived US $560 million dollars less than what had been projected.
Lay-offs and schedule cuts
The report specifies that only US $400 million dollars were perceived by the tourist sector, which signifies a five-year regression. In the same way, over 75 percent of the companies were left running on bare survival levels or closing operations altogether.
Mogollon explained to Confidencial that as a product of the crisis that has also left 325 confirmed dead, thousands injured, over 700 political prisoners and dozens missing, they’ve had to cut staff and eliminate jobs whose salaries can’t be covered due to lack of income. Hence, in addition to being the hotel owner, he now also serves as the security guard and messenger.
Lucy Valenti, president of Canatur, affirmed that in 2019, the tourist industry remains in crisis, since the government’s misguided policies of confronting the protests violently has destroyed the productive capacity and generated an intangible loss in the country’s image as a tourist destination.
“The expectations for this Holy Week [traditionally the high point for tourism in much of Latin America] are low. Likewise, the country is immersed in a severe economic recession which has caused a reduction of internal consumption. That reduction is directly reflected in tourist activity, because when there’s a reduction in income, the families tend to save, and the first things they cut back on are their recreational or tourist expenses. This has a direct impact on our activity,” Valenti affirmed.
The president of Canatur stated that international tourism, which brings needed foreign exchange into the country, continues very low. The country’s image as a destination hasn’t recovered, and the fact that there’s still no political agreement between the government and the Civic Alliance for Justice and Democracy keeps the activity from reactivating.
“There’s hope that we’ll see some movement during holy week, but nothing compared to what it would be on a normal year. There are still some families with a little buying power, and they generally occupy the summer houses and also the hotels. We’ll have to wait and see. Previously, the tourist installations maintained themselves at 80 or 90% capacity for these dates, but today, the companies have a low level of occupation,” continued Valenti.
Forced to close
At the end of 2016, Gonzalo Duarte inaugurated “El Jacal”, a hostel located in the center of Managua. Five people were working there: two youth who cleaned and also made the breakfasts, a gardener and two receptionists. The growth of his business allowed him to offer tours to popular destinations in Nicaragua at budget rates.
On Holy Week of 2018, “El Jacal” was 100% occupied. The tour packages to different destinations in the country sold out. Foreigners and Nicaraguans alike were delighted with the tours to San Juan del Sur, Pochomil and Masachapa. Luck was with Duarte and other colleagues who, like him, had hostels.
The repression and violence exerted by the government of Daniel Ortega against the protestors who were demanding his departure caused the tourists who were staying in “El Jacal” to cancel their tour packages. For several days, the foreigners didn’t leave the hostel. They soon decided to leave the country altogether for fear of becoming victims of the government attacks.
“One group cancelled their reservation three days before arriving in Nicaragua. By May 30, we had counted around 74 cancelled reservations. Others didn’t even call us, but just didn’t appear at the hostel. The few that communicated said that they weren’t leaving their homes due to the situation that was occurring,” Duarte recounts.
The owner of “El Jacal” temporarily closed his hostel at the end of June, since there were no reservations at all. Duarte noted that he couldn’t foresee any progress in the future and had to seek another way of earning a living. The business that he had put so much into in 2016 is currently “on hold” until future notice, or until the situation in the country improves.
“Right now, it’s on hold, but plans to reopen it are always there. If I could open it as soon as possible it would be better, but seeing the situation we’re in, speaking with colleagues who are still squeezing out their last drops to continue functioning, doesn’t motivate me to reopen,” Duarte explains.
The Canatur report confirms Duarte’s experience and that of other hotel and hostel owners who’ve had to close operations for lack of clients interested in visiting Nicaragua. According to the document, in this branch of business there’ve been at least 62,000 lay-offs, while some 18,000 have seen their jobs altered in some way. In all, around 80,000 families have been affected, and the principal blow can be noted in the quality of services offered.
According to the Canatur president, the hotels, hostels, restaurants and other businesses in the tourist sector that have survived the impact of this crisis, have reduced their operational costs to a minimum. In some cases, the owners and their families have remained as the only ones running the establishments. Many staff have been laid off and others have turned to activities trying to attract the domestic market and in this way help themselves to cope with this situation.
“The hotels in Managua and in some of the departments where there’s industry or free trade zones, are helping support themselves by attracting the corporate business personnel who comes to work in those businesses. Vacation tourism is nearly non-existent. However, the national guests don’t generate any foreign currency; it’s only international tourism that yields the hard currency that the country needs. What national tourism does do, though, is help the companies to sustain themselves and generate income to pay their operational costs,” Valenti explained.
The demands of the business leaders from the tourism sector
On the island of Ometepe, in Rivas department, foreign tourism isn’t raising its head either. Humberto, owner of a hotel on the paradisiacal island, explained to Confidencial that the people who are coming to enjoy the attractions of this site are mostly Nicaraguans, and they stay for very little time. The bonanza of the past years is in free-fall.
“We thought that things were going to pick up, but nothing like that is happening. It can’t be done while that senor doesn’t settle things with the Civic Alliance and with the people. He’s stubborn, he wants to continue in power and he only makes use of arms. Potential foreign tourists see this from their country and prefer to go somewhere else or to stay home,” explained Humberto, who asked not to use his real name for fear that the municipal authorities might punish him for voicing his opinion about the national crisis.
For the business leaders of the tourism sector, the solution for the problem of the drop in this sector is a climate of safety, better governance, less oppression, greater consensus and zero impositions. In the same vein, they believe that there must be respect for those who generate employment and thus diminish poverty.
“Our principal demand as a sector is for a true political will to reach an accord that would guarantee social peace and stability in Nicaragua. For us, that’s basic in order to recuperate tourist activity. Nonetheless, up until now, we’re not seeing that such a will exists, because agreements have been signed that aren’t being complied with,” Valenti insisted.
She further notes, if there are no accords this year, the tourism sector is going to drop much more than in 2018, and we’ll probably be speaking of a tourist industry on life support that will take a great deal to recover in the future.
“An agreement must be reached. We can’t continue the way we are, since we’re a very fragile economy that’s totally affected. It’s going to take a huge effort to recover,” believes Gonzalo Duarte, owner of the “El Jacal” hostel.
To Mogollon, the way out of the crisis will also need to include moving up the presidential elections. This is a topic that up until now the Sandinista government has refused to discuss at length at the dialogue table.
“In order for national tourism to recover and return to normal, we must have elections, because if not, we’re going to end up like Cuba or Venezuela. This process we’re living can’t be put in reverse,” concluded Mogollon.