USA TODAY International Edition
Businesses struggling after beach closures
In Puerto Rico, a balance between COVID- 19 and commerce
Luis Ofarrill reminisces about the nights when Afro- Puerto Rican music would fill his restaurant with dancing couples and the sounds of drums.
Ofarrill, of Loíza, Puerto Rico, knows he’s not alone as the COVID- 19 pandemic has battered small businesses all over the island, but he feels especially vulnerable because his Caribbean cuisine restaurant, El Imán is next to the beach.
Puerto Rico has implemented several executive orders aimed at diminishing the spread of the coronavirus that causes COVID- 19, including some that restrict visits to the beach. Since March, businesses that depend on beach activity to operate have faced a turbulent year as beach restrictions have alternatively eased and tightened.
“As soon as the beaches are closed, my sales automatically decline,” Ofarrill told USA TODAY. “Since we depend a lot on tourism and the constant traffic to Loíza, a domino effect takes place if you keep people from coming to the beach.”
A complete ban on beach visits was instituted last March, but it was eased slightly in July so locals and tourists could go to beaches to exercise. After reopening beaches fully in September, former Gov. Wanda Vázquez then passed an executive order to close the beaches again in November until January. Beaches are now open for recreational use.
The island has more than 94,000 confirmed cases of COVID- 19 and more than 1,800 deaths as of Feb. 4, according to Johns Hopkins University data. During the periods Puerto Rico experienced case spikes, the government introduced restrictions to stem the spread of COVID- 19 but amended orders to ease restrictions on businesses and beach activity as cases declined.
The latest beach closure, which lasted until Jan. 6, caused a more than 50% decline in sales for El Imán, according to
“Since we depend a lot on tourism and the constant traffic ... a domino effect takes place if you keep people from coming to the beach.” Luis Ofarrill Restaurant owner
the owner.
The November executive order also prohibited the sale of alcohol on Saturdays and Sundays, which affected businesses, such as El Imán, that rely heavily on alcohol sales.
“By closing the beaches, you’re not only affecting the business but its suppliers and others who indirectly benefit from that business,” said Francisco Santana, president of Puerto Rico’s Small and Medium Business Association. According to Santana, the pandemic has led to roughly 15,000 business closures on the island.
Near El Imán, Gladys Solano owns a small souvenir stand stocked with towels, swimsuits and T- shirts designed with emblematic Puerto Rican figures. Solano says her weekends after beaches fully opened in September were usually busy with tourists visiting restaurants in the area and stopping at her eyecatching stand to buy items for friends and family. When beaches were ordered to close in November, Solano said the lack of visitors to Loíza affected her sales.
“Business hasn’t been the best because of the pandemic, but with people not coming to beaches, there were days I didn’t make a single sale,” Solano told USA TODAY.
According to Santana, roughly 60% of businesses in Puerto Rico are considered microbusinesses, which have fewer than than 10 employees. With a now 30% capacity cap for essential and nonessential businesses established with the current executive order, Santana says many microbusinesses do not find it cost- effective to operate under the new regulations, while larger businesses, such as shopping malls, are able to stay afloat.
As a U. S. territory, Puerto Rico can benefit from the Paycheck Protection Program by the Small Business Administration, which provides loans to help businesses keep their workforce employed during the pandemic.
But according to the Puerto Ricobased analytics firm ABEXUS Analytics, businesses on the island with loans of more than $ 1 million represented less than 1% of all applicants but were granted almost 25% of all Paycheck Protec
tion Program funds awarded to Puerto Rico.
The COVID- 19 restrictions on the island didn’t stop tourists from traveling to Puerto Rico, which is considered a domestic destination for anyone with a U. S. passport. In October, when beaches were open, there were 3,229 flights to Puerto Rico while December brought 4,582 flights, when stricter restrictions were in place, according to aviation data company Cirium.
The island has experienced multiple episodes in which tourists, having escaped pandemic restrictions back home, became violent and destroyed store merchandise after being asked to wear a mask.
Travelers coming to Puerto Rico must show a negative COVID- 19 test result taken no more than 72 hours prior to visiting. Visitors who fail to show a negative test result must quarantine for 14 days. In Puerto Rico, the tourism industry accounts for 80,000 jobs and about 6.5% of the island’s economy.
Puerto Ricans have expressed concerns over travel to the island and tourists contributing to the spread of the virus. Protesters urged the government to halt flights coming from the U. S. at Luis Muñoz Marín airport in July, but the Puerto Rican government didn’t take action.
Although beaches are now open, Puerto Rican businesses are struggling with other financial woes as they brace for a rate increase on their energy bills, unrelated to the pandemic. Puerto Rico Electric Power Authority faces a $ 9 billion dollar debt in bonds, pensions, fuel purchases, among others.
Many of the beachfront businesses now affected by the pandemic were also devastated by Hurricane María in 2017. The island’s reconstruction after the storm has been slower than the recovery of other areas affected by hurricanes, including Florida. On Monday, the Biden administration approved releasing $ 1.3 billion in disaster relief funding for Puerto Rico to speed delivery of delayed funds.
Ofarrill says running the business is getting harder with time, and he hopes another beach closure isn’t on tap.
“The government needs to keep in mind that although I’m allowed a 30% capacity, my rent, water, electricity and other costs are still 100% the same,” said Ofarrill.