An­drea Perez-Sobers

Se­nior Re­porter

The Res­i­dence, a well-known lim­ing spot at One Wood­brook Place, in Port of Spain, closed its doors late last year af­ter years of op­er­a­tion. Its shut­down is no longer an iso­lat­ed in­ci­dent but part of a widen­ing con­trac­tion across T&T’s food, bar, and en­ter­tain­ment in­dus­try, as op­er­a­tors strug­gle to ab­sorb sharp in­creas­es in al­co­hol prices and a dou­bling of bar li­cence fees.
At Six­es So­cial Crick­et in the up­stairs part of One Wood­brook Place, own­er Joan­na Ros­tant de­scribes a busi­ness en­vi­ron­ment that has changed dra­mat­i­cal­ly since the new al­co­hol du­ties took ef­fect in Oc­to­ber. The im­pact, she main­tains, is not the­o­ret­i­cal. It is vis­i­ble in emp­ty ta­bles, short­er limes, and a sharp fall in dis­cre­tionary spend­ing.
Since Oc­to­ber, Six­es has record­ed week­ly de­clines in foot traf­fic rang­ing from 20 to as high as 50 per cent, de­pend­ing on the sea­son. The drop has been most se­vere out­side ma­jor sport­ing events and hol­i­days, pe­ri­ods that tra­di­tion­al­ly sus­tain hos­pi­tal­i­ty op­er­a­tors dur­ing slow­er months.

The de­cline is not unique to Six­es. Oth­er ten­ants in the are re­port­ing sim­i­lar trends, with some con­tem­plat­ing clo­sure or qui­et­ly scal­ing back op­er­a­tions.

Costs rise, cus­tomers dis­ap­pear

Ros­tant points to al­co­hol pric­ing as the most im­me­di­ate pres­sure point. A pop­u­lar vod­ka brand has in­creased by 128 per cent, more than dou­bling in price. Beer, punch and rum, sta­ples of every­day so­cial­is­ing have al­so surged, with a shot of punch mov­ing from $18 to $28 in a mat­ter of weeks.

In some cas­es, op­er­a­tors have ab­sorbed a por­tion of the in­creas­es to avoid pric­ing cus­tomers out al­to­geth­er. That strat­e­gy, how­ev­er, has nar­rowed mar­gins to un­sus­tain­able lev­els. Over­heads such as rent, in­sur­ance, util­i­ties and bank charges re­main fixed. Staffing, one of the few con­trol­lable costs, has been trimmed where pos­si­ble, though Ros­tant stress­es that cut­ting jobs is a last re­sort. The hos­pi­tal­i­ty sec­tor, she notes, em­ploys a large num­ber of young women and sin­gle moth­ers, many of whom re­ly heav­i­ly on tips and ser­vice charges to sup­ple­ment wages.
When pa­trons stop com­ing, those earn­ings dis­ap­pear.
Ros­tant ar­gues the broad­er im­pli­ca­tions are be­ing over­looked. As the coun­try speaks about boost­ing tourism, yacht­ing and To­ba­go’s vis­i­tor econ­o­my, the ero­sion of hos­pi­tal­i­ty earn­ings threat­ens the hu­man re­source re­quired to de­liv­er those ser­vices.

“If there is no at­trac­tion for young peo­ple to work in hos­pi­tal­i­ty be­cause the earn­ings are not there, how do we build a tourism prod­uct?” she asks. The re­sult, she con­tends, is a self-de­feat­ing cy­cle: high­er tax­es re­duce so­cial ac­tiv­i­ty, re­duced ac­tiv­i­ty cuts em­ploy­ment and skills, and the weak­ened sec­tor be­comes less at­trac­tive to both lo­cals and vis­i­tors.

Li­cences dou­ble, mar­gins col­lapse

In March, bar li­cences come up for re­new­al. For Six­es, the an­nu­al fee jumps from $4,500 to $9,000, a 100 per cent in­crease. For small­er op­er­a­tors, par­tic­u­lar­ly gro­cery and mi­ni-mart liquor li­cence hold­ers, the in­crease is even more se­vere, mov­ing in some cas­es from $1,800 to $9,000.

The ef­fect, Ros­tant warns, is re­gres­sive. Small, fam­i­ly-run busi­ness­es are forced ei­ther to pass costs on to con­sumers or re­duce stock and hours. In par­al­lel, a shad­ow econ­o­my emerges as al­co­hol be­comes price-pro­hib­i­tive for a wide cross-sec­tion of the pop­u­la­tion. Re­cent seizures of il­le­gal al­co­hol ship­ments un­der­line that risk.

Ros­tant is blunt about the long-term out­look. Sev­er­al well-es­tab­lished busi­ness­es have al­ready closed, in­clud­ing The Res­i­dence and Cuties, while oth­ers are open­ly ques­tion­ing how long they can con­tin­ue op­er­at­ing at a loss.

“How long can you limp along be­fore you have to pull the plug?” she asks.
‘

An­oth­er dag­ger in the back’

That sen­ti­ment is echoed by Joe Pires, own­er of Samu­rai Restau­rant and Is­land Beer Chill and Grill at One Wood­brook Place, as well as Hap­py Farms in Ch­agua­nas. Pires closed Lu­na Restau­rant in West­moor­ings last year, a de­ci­sion he at­trib­ut­es to cu­mu­la­tive pres­sures rather than a sin­gle pol­i­cy change.
Pires stat­ed, the sec­tor nev­er re­turned to pre-COVID per­for­mance. Sales dropped be­tween 15 and 20 per cent im­me­di­ate­ly af­ter re­stric­tions were lift­ed and nev­er re­cov­ered. Ris­ing freight costs, in­creased food prices, and high­er rents com­pound­ed the prob­lem.

The al­co­hol tax hike, he de­scribes, was “an­oth­er dag­ger in the back”.

Since De­cem­ber, foot traf­fic at Samu­rai and Is­land Beer has fall­en by an ad­di­tion­al five to eight per cent, forc­ing man­age­ment to re­think por­tion sizes, rene­go­ti­ate with sup­pli­ers, and roll out pro­mo­tions de­signed sim­ply to keep cus­tomers com­ing through the door.

Al­co­hol com­pa­nies, he ex­plained, have pulled back on mar­ket­ing and spon­sor­ship, in­clud­ing Car­ni­val fetes, as they as­sess the im­pact on their own sales. That re­treat fur­ther weak­ens an ecosys­tem that de­pends heav­i­ly on brand part­ner­ships and event pro­mo­tion.

With bar li­cence re­newals ap­proach­ing, Pires de­scribes the next six months as crit­i­cal. Meet­ings with land­lords are now part of a sur­vival strat­e­gy, along­side ag­gres­sive cost con­trol and at­tempts to stim­u­late de­mand in a pop­u­la­tion in­creas­ing­ly fo­cused on es­sen­tials rather than en­ter­tain­ment.

‘Tax­ing un­til noth­ing cir­cu­lates

A se­nior busi­ness­man with ex­ten­sive hold­ings in bars and restau­rants, who asked not to be named due to on­go­ing ne­go­ti­a­tions with land­lords, paints an even stark­er pic­ture.

Across his port­fo­lio, sales have dropped by as much as 50 per cent. Dis­pos­able in­come, he ar­gues, is be­ing steadi­ly erod­ed as tax­es rise while wages stag­nate. The re­sult is a con­trac­tion in spend­ing pow­er that rip­ples through every sec­tor.

When peo­ple stop go­ing out, com­pa­nies cut staff. As un­em­ploy­ment ris­es, spend­ing falls fur­ther. Gov­ern­ment rev­enue ul­ti­mate­ly de­clines, de­spite high­er tax rates.

“You’re tax­ing un­til you out-tax every­body,” he lament­ed.

The mood, he stressed, has shift­ed. Fear of crime, grid­locked traf­fic, ag­gres­sive tick­et­ing, and a gen­er­al sense of eco­nom­ic anx­i­ety have damp­ened the de­sire to so­cialise. Al­co­hol and cig­a­rettes, now high-val­ue items, have be­come fre­quent tar­gets for theft.

The cul­tur­al cost is al­so mount­ing. T&T’s iden­ti­ty as a place of cel­e­bra­tion, Car­ni­val and com­mu­nal lim­ing is be­ing erod­ed, he ar­gues, at a time when those at­trib­ut­es should be lever­aged as eco­nom­ic as­sets.

Killing the gold­en goose

Ros­tant draws a di­rect com­par­i­son with the en­er­gy sec­tor, where she spent two decades be­fore en­ter­ing hos­pi­tal­i­ty. She re­calls how in­creas­ing­ly oner­ous fis­cal terms dis­cour­aged in­vest­ment, ul­ti­mate­ly con­tribut­ing to de­clin­ing gas pro­duc­tion.

Fif­teen years lat­er, she sees a sim­i­lar pat­tern emerg­ing in hos­pi­tal­i­ty, an­oth­er rev­enue-gen­er­at­ing sec­tor be­ing squeezed with­out suf­fi­cient re­gard for down­stream con­se­quences.