Monday, December 14, 2009

A sign of the recession

I have been showing some photos from the Garden Plaza Shopping Center, so I am sharing this photo of a home furnishing store at the shopping center. There is a sad story behind this photo, however.

I took this photo about 18 months ago. I thought it would surprise some people, as such contemporary interior design and a large, modern home furnishing store is not what you would expect to find in a small Costa Rican beach town that has only recently graduated from a fishing village, to a surfing town, and now to a resort catering to international visitors and residents.

I never got around to posting the photo, as I usually show pictures of the beach, wildlife, etc., and not stores. Sadly, this store is now closed. It is a victim of the recession. Most of the customers for a store such as this would be the owners of new homes and new condos being built in the area, as they would obviously need to furnish their entire residence. Tamarindo has only a few thousand residents, so without new housing there would not be the population to support a store such as this.

Because nearly all of the new homes and condos in the area are built (and priced) to sell to Canadians and Americans, the recession in the USA has hurt the market in Costa Rica. Visitors are not as likely to have enough equity in their homes in the USA or value in their investment portfolios to decide to buy a second home or vacation home in Tamarindo or other nearby beach communities. As a result, the construction boom has slowed, not as many new houses and condos are being built, and not as many people need new furniture.

The tourist market has not been as affected as the new home and condo building market, although world wide tourism is also down. There has been some softening in the tourist businesses in Costa Rica. One of the steps the country is taking is trying to market Costa Rica vacations more to Europeans, including increasing direct flights from Europe, which will make Costa Rica less dependent on the US economy.

My own experience is that the rental occupancy of my two condos has remained very high, but I have reduced my prices during 2009 to achieve the high occupancy. About one-third of my guests are Canadians, the balance are Americans, except this past summer I had my first European guests, a delightful couple from Barcelona.

On our travel photos site, Viva la Voyage, this week we are showing photos of the animals of Monterrey, California.

8 comments:

brattcat said...

This post underscores the interdependence of all of our economies and well-being.

Frank said...

The recession has hurt all segments of our world. I have more than one retailer that I posted months ago on one of my blogs that is now closed. It hurts. We hate to see stores, big or small, go out of business. Home prices in our neighborhood (a National Historic District - which keeps values high and stable) are down about 30%. Therefore property taxes have been adjusted down.

It's a mess and your beautiful corner of the globe is getting the brunt of the disappearing vacation dollar. (that was a very nice looking store, too.)

Sharon said...

What a shame to lose this beautiful store. It must have been nice to have a furniture store so close to the town where building was going on.

Jarart said...

I thought it was a picture of the inside of one of your condos when I saw your son sitting on the sofa. The store was decorated so nicely, too bad about it having to close.

JM said...

This is so sad! And it's happening everywhere...

Bob Crowe said...

I find this very interesting. The state of the housing and retail market here is similar (although St. Louis is hardly a resort destination). Our downtown mall is dead and empty.

glenda said...

This is really too bad. What great furniture.

Anonymous said...

This store was part of a chain which imports from Germany and has it's main store in San Jose. Although some people in Tamarindo opt for this type of furniture, it is my experience that most people like to use tropical designs and natural fibers in beach homes and condos. Another consideration possibly as to why this store did not succeed.

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