San José, Costa Rica, since 1956

Granada Hopes for High Season Rebound

Businesses owners in Granada are crossing their fingers in hopes that the clearing skies and recently improved energy situation here will help rejuvenate this colonial city’s tourism industry after a year of stunted growth.

As the country’s top tourism destination, Granada has been whacked with string of problems this year, from daily power and water rationing to a bankrupt municipal government on the verge of collapse. In addition, the return of President Daniel Ortega and the slumping U.S. real estate market have slowed property sales after several years of boomtown growth, causing some concern in this bastion of conservativism.

Yet despite the worries, investment has continued to flow into the city and new businesses are opening here every day, according to the municipal tax registry. In the first 10 months of this year, a total of 542 new businesses opened – more than all of 2006 and more than twice the number of businesses that have closed this year.

A look behind the numbers shows further signs for optimism. In the first 10 months of 2007, 15 new hostels and three new hotels have opened, while only two hostels have closed. Nine restaurants have opened, while four have closed. Thirteen new bars have opened, and only two have closed. The number of cyber cafés has increased three-fold.

Statistics aside, Granada’s growth is apparent just by walking down the street, where a bevy of trendy new bars, cafes and restaurants have popped up to cater to tourists on both sides of Central Park.

Evan Durand, a realtor and self-described “low-risk guy,” understands the real estate market and the challenges of doing business here as well as anyone else. Next week, Durand and his girlfriend, Maria Isabel Cantón, will open a new cocktail bar,Nectar, on the popular Calle La Calzada, a popular pedestrian boulevard that has been dubbed Granada’s “zona viva.”

“I don’t doubt that tourism will continue to grow here,” Durand said, pointing to the city’s history, geographic location, architecture and natural endowment as factors that trump any problems the city may have experienced recently. “Every tourist who comes to Nicaragua visits Granada. And every tourist who comes to Granada walks down La Calzada; so that takes all the risk out of opening a business.”

Spreading the Word

The word on Granada continues to make its way around the world, thanks to rave reviews in renowned guidebooks and a series of high-profile travel features in international newspapers. The New York Times alone has “rediscovered” Granada twice in the past two months in gushy travel features that call it the “Ciudad of Dreams.”

Granada has also had some bad press, mostly at the hands of its own children. A Nov. 7 article in the daily La Prensa and subsequent editorial cartoons dwelled on the businesses that have closed, painting a bleak picture of a ghost town in the making.

The reality, however, is somewhere between the glow of The New York Times and the gloom of La Prensa.

Though tourism growth continues, the growth rate has dropped from last year’s 8% to 4.6% through October of this year, according to statistics from the Nicaraguan Tourism Institute (INTUR).

The real estate market has also slowed. Coldwell Banker’s Sara Murphy said the Granada property market has been sluggish in recent months, but not necessarily due to slowed tourism growth.

“Figures across Central America – particularly Nicaragua, Belize, Costa Rica and Panama – indicate that there has been a softening of the real estate market across the region over the last few months. This seems to be more directly linked to the credit crunch and real estate slowdown in the United States than to any slowing in the rate of tourism,”Murphy told The Nica Times in an e-mail.

She added that her real estate firm has been seeing more interest from potential Canadian and European investors due to a strong Euro and Canadian dollar.

In Granada, many businesses say they have noticed a dip in tourism, and tourists who come seem to be spending less time here – a trend that’s being blamed on electricity and water rationings, says Blanca Coronel, INTUR’s director in Granada.

Tourists “don’t want to go out into a dark city, where the only parts that aren’t dark have the constant sound of a generator,” said Cantón, partner in the new bar Nectar and manager of the luxurious Hotel Plaza Colón.

“All those who had bad experiences last year decided not to come back,” she said.

Yet despite the energy problems, Plaza Colón recently tripled its number of rooms to 27 and added a pool and a classy new wine bar overlooking the Central Park – an investment that looks to pay off now that high season is starting. Cantón says the hotel is already booked for November, December and January, when it expects to be operating at 100% occupancy.

Similar booking rates are being reported at Hotel Colonial,Hotel Alhambra and Hotel Dario.

“I have faith that things are going to improve for Granada,” Cantón said.

At Hotel Gran Francia, owner Ligia Vaughan admits it has been a rough year, but says she’s seen worse.

“I believe Nicaragua is just getting to be on the world’s radar. It’s a country with a lot to offer,” she said.

Roger Solórzano, who runs the Nicaragua tourism Web site, seconds the notion that international interest in Granada is growing. He says that the number of people who visit his Web page has tripled in three years and that “Granada and its destinations continue to be among the most visited pages.”

Future Growth

Granada is also about to get its first-ever commercial center, which is being built on Calle Inmaculada, near the entrance to the city.

Plaza Inmaculada, a $2 million project that is being funded and built by the Chamorro family, is scheduled to open next February, complete with banks, restaurants, a food court, 12 stores and a La Colonia supermarket. All of the architecture will be colonial style, with red-tile roofs, breezy walkways and palm trees.

There will also be a 92-spot parking lot, the first of its size in the city.

“Granada is a tourist city and it needs services that it doesn’t currently have,” project manager Ernesto Chamorro told The Nica Times. “This project will be small, but it’s a start and it will help the neighborhood to grow.”

INTUR, too, has plans to improve the tourism offering in Granada by helping to clean and restore El Castillo de San Pablo, the island fort that once helped defend the city from marauding pirates. INTUR Granada recently took over management of the lakefront centro turístico – a stretch of local bars, restaurants and boats rentals – and plans to beautify the area.

Tourism boosters are also looking forward to next February’s International Poetry Festival – the city’s single largest tourism draw of the year, packing the city for a week.

For many, the New Year is looking a lot brighter for Granada – and if the power stays on it should remain that way.

“I think that [the outages] were the strongest deterrent to growth,” said Laurance Ginsberg of the popular Euro Cafe. “If the light stays on, I have a lot more confidence in the future.”


Comments are closed.