Monday, October 06, 2008

The local reckoning

I'm expecting there to be a bit of a shake-out amongst businesses in La Antigua. In almost every business area there are simply too many operations chasing after what will soon be a dwindling number of visitors and their cash. The rather obvious surplus of 'boutique' hotels should be curtailed fairly quickly.

Guatemala isn't that cheap relative to Mexico or other parts of Central America. The capital is recognised as the most expensive city in the region for example.

Menu prices in La Antigua might be 30-50% cheaper than London equivalents, but eating out (especially at the establishments that suck in the gringos) is comparably expensive when one considers what it costs to buy the ingredients at the market and cook for yourself at home.

Fast food has to be one of the biggest rackets running here. Even with Sterling still quite strong against the Dollar, a medium-sized pizza at Domino's costs roughly the same as it would in the UK, yet the chain's overheads in Guatemala would have to be significantly lower surely?

A number of foreigners who have been living here off local ventures for years appear to be selling up and shipping out, one of our closest friends here amongst them. He states that mounting concerns about security and the increased scrutiny of start-ups by the local tax authorities are further discouraging ex-pat entrepreneurs.

Many of Antigua's most high profile businesses have changed ownership in the past couple of years (La Escudilla, Welten, Rainbow Cafe etc.) and in some cases from foreign to local hands.

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