Local businesses focus on survival and recovery in 2021, while some national franchises plan expansion

Jan 18, 2021 | 6 comments

2020 was devastating for Cuenca businesses and although there is cautious optimism for 2021, owners and managers say significant recovery depends on the pandemic.

The new Casa del Parque in El Centro is one of the bright spots of Cuenca’s restaurant scene, hosting eight new and existing dining establishments.

“In September and October last year, we had good feelings for 2021 but some of those have faded,” says Fernando Romero, president of the Azuay Chamber of Small Industry. “The cases of the coronavirus were declining in the country and we heard that that we would have a vaccine within a few months. We still think the vaccine will help end the pandemic but now we hear it could take two years to vaccinate the population and in the meantime we worry that the new virus strains could mean new restrictions – and restrictions are deadly for business.”

Romero says the emphasis will be on “slow growth and recovery” in the new year, with few businesses planning major expansion. “For most of us, there is no money for investment since we have used our credit and savings for surviving last year. If we can rehire some of the employees we furloughed in 2020 and rebuild revenues in the new year we will consider it a success.”

Not all businesses are in survival mode, however. The national Favorita Corporación is pushing ahead with plans for a new Supermaxi in suburban Challuabamba and proceeding with plans for a MegaMaxi in downtown Cuenca.

Favorita admits that unlike most businesses, it has fared well during the pandemic. “Food is an essential commodity and because of the closure of restaurants and people’s reluctance to eat away from home, we actually did better than expected in 2020,” says Álvaro Rothembach, Favorita regional manager. “Despite construction delays due to Covid, we successfully expanded and updated the Supermaxi at El Vergel and we hope to begin at least one more Cuenca renovation project in 2021.” He added that plans for the Megamaxi will be announced soon.

Another major investment in the local market in 2021, will be opening of a new showroom by the Colineal furniture chain. Construction of the $5 million project is underway at the corner of Gran Colombia and Unidad Nacional.

Expansion by Favorita and Colineal are the exceptions, however, in the local business market.

Associations representing restaurants, hotels and tourism say many of their members have gone out of business. “The pandemic has been brutal on our sector and we don’t yet know the full extent of business closures and job loses,” says Cuenca Tourism Association spokeswoman Leandra Maldonado. “Some members plan to reopen but do not know when, while others have closed their doors for good. We believe employment for restaurants and hotels is down about 50 percent and even more for tour operators.”

Among restaurants and hotels, Maldonado says the government’s short-lived state of emergency at Christmas and New Years, was devastating. “Members were looking forward to a profitable holiday season and then the government shut everything down,” she says. “It hurts even more that the shutdown was ruled illegal by the court but by that time the damage was done.”

Despite losses, Maldonado says one bright spot among the hospitality industry is the number of new restaurants that are opening, particularly in the historic district. “Some entrepreneurs are thinking that this is a good time to get a foothold, despite the circumstances. They know that better times are coming and want to be well-positioned when that happens.”