An­drea Perez-Sobers

Se­nior Re­porter

an­drea.perez-sobers@guardian.co.tt

The restau­rant in­dus­try in T&T is fac­ing an un­prece­dent­ed squeeze, and the clo­sure of Trot­ters Gulf City, San Fer­nan­do, stark­ly il­lus­trates just how acute the pres­sures have be­come.
Restau­rant own­ers say steep new al­co­hol tax­es, ris­ing Na­tion­al In­sur­ance con­tri­bu­tions, es­ca­lat­ing elec­tric­i­ty and cook­ing gas costs and high­er rents are col­lid­ing to crush al­ready thin prof­it mar­gins, forc­ing full-ser­vice op­er­a­tors to make im­pos­si­ble choic­es.
Pe­ter George Jr., CEO of Trot­ters Group, told Sun­day Busi­ness Guardian that the de­ci­sion to shut­ter the Gulf City out­let was dri­ven by an un­re­lent­ing con­ver­gence of pres­sures. “The post-covid re­cov­ery has been slow, con­sumer spend­ing has shift­ed and steep tax­es and spi­ralling in­put costs are cre­at­ing an ex­tinc­tion event for full-ser­vice restau­rants,” he said. George de­scribed how in­creas­ing­ly price-con­scious cus­tomers can now achieve “four times the val­ue” by buy­ing al­co­hol at re­tail stores and drink­ing at home, un­der­min­ing a cru­cial prof­it cen­tre for restau­rants.

Voic­es from the in­dus­try

In­dus­try lead­ers echoed George’s warn­ings.

Derek Chin, ex­ec­u­tive chair­man of Movi­eTowne and the Dachin Group of Com­pa­nies, de­scribed the en­vi­ron­ment as one that “on­ly those with tough dis­po­si­tions” can en­dure. Ris­ing crime, re­duced dis­pos­able in­come, high util­i­ty costs and labour in­ef­fi­cien­cies are squeez­ing op­er­a­tors from all sides.

“We ex­pect to see many restau­rants ei­ther clos­ing or scal­ing down their op­er­a­tions,” Chin said. “To sur­vive, you need con­stant in­no­va­tion, cost-cut­ting, and very shrewd buy­ing, but even that might not be enough.”
Dipc­hand Per­sad, own­er of Pas­sage to Asia, added that be­yond tax­es and tar­iffs, the pro­lif­er­a­tion of street food and food car­a­vans has di­vert­ed cus­tomers away from tra­di­tion­al restau­rants.

“Gy­ros, burg­ers, pop-ups every­where... they’ve tak­en away from the high-end restau­rants,” Per­sad said.

With his Port of Spain branch al­ready closed due to falling sales and high rent, he em­pha­sised that sur­vival in­creas­ing­ly de­pends on prop­er­ty own­er­ship and tight cost con­trol. “Mon­ey is not cir­cu­lat­ing. When peo­ple are out of jobs, they don’t spend, and that af­fects every­one,” he added, high­light­ing the broad­er eco­nom­ic rip­ple ef­fect.
Charles Car­val­ho, co-founder of the Tourism In­dus­try As­so­ci­a­tion of Trinidad and To­ba­go (TIATT), said the clo­sure of Trot­ters South re­flects sys­temic is­sues in pol­i­cy and gov­er­nance.

“The dou­bling of al­co­hol tax­es, high­er elec­tric­i­ty rates, in­creased NIS con­tri­bu­tions and ris­ing rents col­lec­tive­ly cre­ate an un­sus­tain­able en­vi­ron­ment for restau­rants,” he said. For an in­dus­try that sup­ports thou­sands of jobs and un­der­pins tourism, these cu­mu­la­tive pres­sures risk not on­ly busi­ness vi­a­bil­i­ty but al­so wider eco­nom­ic sta­bil­i­ty.

Sys­temic chal­lenges be­yond tax­es

George un­der­scored that the pres­sures go be­yond fis­cal mea­sures. For more than a decade, the pri­vate sec­tor has con­tend­ed with what he calls a “hos­tile” re­la­tion­ship with the state. En­tre­pre­neurs felt treat­ed as in­con­ve­niences rather than part­ners in growth. The dys­func­tion ex­tends to for­eign ex­change ac­cess, cre­at­ing price in­sta­bil­i­ty for im­port­ed goods and fu­el­ing a flour­ish­ing black mar­ket.

“Cap­i­tal fol­lows op­por­tu­ni­ty,” he warned. “If that op­por­tu­ni­ty doesn’t ex­ist here, it will go else­where.”

The Gulf City branch, he said, had been un­der­per­form­ing for some time. Main­tain­ing a large, ex­pe­ri­en­tial, full-ser­vice restau­rant in such an en­vi­ron­ment was no longer fi­nan­cial­ly vi­able. Staff were re­de­ployed to oth­er lo­ca­tions, in­clud­ing a new project in Ma­yaro, while those un­able to move were com­pen­sat­ed in full com­pli­ance with labour laws.

Chin em­pha­sised that Trot­ters’ clo­sure is a warn­ing for the en­tire in­dus­try.

“These are not iso­lat­ed pres­sures,” he said. “We are see­ing ris­ing costs across the board, labour short­ages, lim­it­ed ma­te­ri­als due to for­eign ex­change scarci­ty and a pub­lic that is spend­ing less on din­ing out. Restau­rants and hos­pi­tal­i­ty busi­ness­es are be­ing squeezed to a point where sur­vival re­quires con­stant adap­ta­tion, in­no­va­tion and sac­ri­fice.”

Per­sad de­scribed the cas­cad­ing ef­fect of these pres­sures on day-to-day op­er­a­tions.

“With high­er tax­es, NIS, elec­tric­i­ty and cook­ing gas, every­thing is more ex­pen­sive,” he said. “Cou­ple that with street food com­pe­ti­tion and the gen­er­al down­turn in the econ­o­my, and even es­tab­lished restau­rants are strug­gling. Peo­ple are not go­ing out like they used to, and that’s hit­ting every part of the in­dus­try.”

Car­val­ho said that TIATT is mo­bil­is­ing to ad­vo­cate for in­dus­try re­lief and a more struc­tured part­ner­ship with the gov­ern­ment.

“We need phased im­ple­men­ta­tion of tax­es, struc­tured con­sul­ta­tion be­fore ma­jor pol­i­cy changes and tar­get­ted sup­port for small and medi­um-sized op­er­a­tors,” he said. “With­out that, we risk los­ing the back­bone of the tourism and restau­rant sec­tors not just in San Fer­nan­do, but across Trinidad and To­ba­go.”

For George, the clo­sure of Gulf City is em­blem­at­ic of deep­er is­sues. Be­yond tax­es and util­i­ties, he sees a sys­temic chal­lenge in the way the pri­vate sec­tor is po­si­tioned rel­a­tive to the gov­ern­ment. “The pri­vate sec­tor is the back­bone of the econ­o­my, yet pol­i­cy choic­es and bu­reau­crat­ic bar­ri­ers con­tin­ue to make it hard­er for busi­ness­es to thrive,” he said. “With­out struc­tur­al re­forms to match rev­enue-rais­ing mea­sures, fis­cal pol­i­cy be­comes a fool’s er­rand.”

For­eign ex­change volatil­i­ty com­pounds the prob­lem. While Trot­ters Group has man­aged to se­cure lim­it­ed US dol­lars for im­ports, many sup­pli­ers face un­pre­dictable costs, forc­ing op­er­a­tors to ab­sorb price swings that fur­ther erode mar­gins.

“We are de­fend­ing and sub­si­dis­ing the most pre­cious and most in-de­mand as­set in the coun­try,” George said, high­light­ing the dis­tort­ed in­cen­tives and mar­ket dys­func­tion caused by the for­eign ex­change sys­tem.

The com­bined ef­fects of in­creased al­co­hol du­ties, NIS con­tri­bu­tions, elec­tric­i­ty, gas, and rent, along with re­duced con­sumer spend­ing and com­pe­ti­tion from in­for­mal ven­dors, are re­shap­ing the in­dus­try. Op­er­a­tors are cut­ting menus, re­duc­ing hours, and seek­ing in­no­v­a­tive ways to stay afloat. But these mea­sures are, at best, tem­po­rary ban­dages on a sys­tem un­der strain.

Chin not­ed that while some op­er­a­tors are find­ing ways to adapt through pro­mo­tions, down­sized op­er­a­tions or new con­cepts the room for ma­neu­ver is shrink­ing. “Even the most re­source­ful busi­ness­es will strug­gle if these pres­sures con­tin­ue,” he said. “The sec­tor is on the verge of a shake­out.”

Per­sad high­light­ed the hu­man cost. “If peo­ple don’t have jobs, mon­ey doesn’t cir­cu­late,” he said. “When mon­ey doesn’t cir­cu­late, it hits every link in the chain: sup­pli­ers, staff, restau­rants. Even if you sur­vive, it’s a con­stant bat­tle to stay prof­itable.”

A call for pol­i­cy and part­ner­ship

Car­val­ho said TIATT is push­ing for a more com­pre­hen­sive ap­proach to sus­tain­ing the in­dus­try. Rec­om­men­da­tions in­clude en­er­gy ef­fi­cien­cy in­cen­tives, tax re­lief on lo­cal food pro­duc­tion and struc­tured en­gage­ment with pol­i­cy­mak­ers. These mea­sures, he said, would help restau­rants man­age op­er­a­tional costs with­out sac­ri­fic­ing ser­vice qual­i­ty or em­ploy­ment.

In­dus­try lead­ers, in­clud­ing Derek Chin, Dipc­hand Per­sad and Charles Car­val­ho cau­tion that with­out tar­get­ed pol­i­cy in­ter­ven­tion, fis­cal re­lief mea­sures and clos­er col­lab­o­ra­tion be­tween gov­ern­ment and the pri­vate sec­tor, the pres­sure on restau­rants and hos­pi­tal­i­ty busi­ness­es will con­tin­ue to es­ca­late.
The clo­sure of Trot­ters South, the busi­ness­man added, un­der­scores the fragili­ty of the sec­tor and high­lights the ur­gent need for so­lu­tions to pre­serve jobs, sus­tain in­vest­ment and pro­tect a seg­ment of the econ­o­my vi­tal to na­tion­al growth.
Trot­ters Group in­cludes Bu­zo Os­te­ria Ital­iana and Ama­ra, which ex­pand­ed in­to mar­kets such as Ja­maica and Bar­ba­dos, where George sees more pre­dictable op­er­at­ing en­vi­ron­ments.

Blue Star Din­er, which was al­so part of the group, closed its doors at the end­ing of Au­gust. The restau­rant ini­tial­ly opened its doors in No­vem­ber 2019 and the busi­ness was on an up­ward tra­jec­to­ry, es­pe­cial­ly when it start­ed op­er­at­ing around the clock over week­ends. Then the pan­dem­ic struck in March 2020 and busi­ness fell off.