State of Aruba

Lately I’m receiving many similar questions about the current state of Aruba’s economy. It’s a valid question by all means. The economy has been on people’s radars for a long time now and naturally people are curious to learn how an island based on a tourism economy is faring.

Aruba has a mono-economy which heavily depends on arrival numbers from North America, namely the US. It’s exactly this country that has been hit the hardest with the economic downturn. Efforts by island officials to seek travelers from elsewhere has brought some diversity, but clearly not enough.

Construction

A sector that’s an economic catalyst is construction. The last few years new projects appeared everywhere and money flew into the local economy from abroad, fueling the economic growth even more. Several construction projects now have come to a standstill, or the construction-pace has been lowered. That was to be expected. Having said that, there is still enough construction going on to keep people busy.

Divi Residences Aruba
Construction down, but certainly not out

Projects such as Palm Beach Plaza, Acqua condo, Divi Phoenix, Oceania condo, Aruba Airport, WEB water/power company’s new wind park are a few major projects that are ongoing. Additionally, it’s election season in Aruba, thus the island government is cranking up its investments with major infrastructural projects.

Restaurants

I recently read an article in a local newspaper about the troubles the restaurant business is allegedly facing. The tenure of the article was mostly negative of tone and the writer of the article took one source as a reference to back the claim of the recent closure of a few restaurants. The source complained not only about the lack of costumers, but also the amount of newcomers into the restaurants business.

In all fairness, the amount of clients has been reduced and the amount of new rivals into the market is staggering. But I don’t think measures of protectionism in the restaurant business by the government is the answer. If your restaurant is good/strong, there is nothing to be worried about, right? By the way, he didn’t utter the word “protectionism”, I did.

My beef with the article was the lack of analysis about how many restaurants opened/closed in this year. Instead of generalizing, take a closer look as to why the individual restaurant had shut down. It’s easy to blame the broad economic situation.┬áThe closed restaurants mentioned in that article are Havana Beach Restaurant (near the airport) and Le Dome Restaurant (near Eagle Beach).

It’s not enough to just renew the menu and adjust the prices. The overall service to the client is of epic importance. If the staff isn’t committed, the food won’t matter to the client. Perhaps your location isn’t the best anymore. Those little ads you place in the tourist magazines don’t stand out. Or you’ve become to commercialized. Mismanagement. There could be a wide range of reasons as to why restaurants shuts down.

For example, the food at El Gaucho Restaurant is awesome and the prices aren’t that bad. However, some feel that the restaurant is too dark, it clearly doesn’t appeal to everyone. Should El Gaucho change due to the opinion of some people? Or just keep doing what they’ve been doing all along? In the case of El Gaucho, they have a huge name recognition locally and I wouldn’t change anything. The restaurant business in Aruba is very competitive and you need to be one step ahead, more importantly, listen to your customers.

First half gone

Aruba’s tourism economy has shown to be pretty strong in the past, and in my opinion it’s showing it again. Naturally not everyone will share this assessment, which I respect. One thing is for sure, the weaker businesses will shut down, while the strong ones will prevail. With great customer care and lots of creativity you will make it.

A restructure of the market isn’t necessarily a bad thing. In fact, I believe strongly that it’s necessary to have a restructure at least once every decade. All things point towards a recovery in 2010.

2009 is half gone and the arrivals to Aruba have dropped a couple a percentage points, in comparison to 2008. That’s not that bad at all, comparing to the Caribbean average. The second half of the year is expected to slow down further. For a business in general, 2009 has to be considered a transition year – or lost year – and start looking forward to next winter.

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Gabriel

Former Aruba tour guide, trying to provide value to Aruba travelers.

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