Cancún Restaurants in the Red as Power Outages Add to Mounting Losses

Cancún, Quintana Roo — Restaurants across Quintana Roo are operating in the red, squeezed by falling customer numbers and rising costs and now hit by frequent power outages that spoil food and ruin equipment, the head of the state’s restaurant industry chamber said.

Perla Flores Navarro, president of the Cancún chapter of the National Chamber of the Restaurant and Seasoned Food Industry (Canirac), said the blackouts have deepened a year of shrinking margins for a sector that is the destination’s second-largest source of jobs.

Owners Hold Prices Down as Costs Climb

Flores Navarro said operators should have raised prices more this year to absorb higher costs for supplies, local and federal taxes, and inflation, but held back to keep diners coming through the door.

“The truth is that this year we should have raised prices more, precisely because of all the adjustments — even in supplies, inflation itself, taxes went up, not only local taxes but the taxes we have to pay to the federal government,” she said. “So of course all of that has eaten into margins. We have raised prices very little, and where it has hit directly is in the restaurant owner’s profit.”

Losses in gross profit now range between 50 and 70 percent, she said, forcing owners to put in their own money to stay afloat. To avoid layoffs, businesses are agreeing to scheduled leave with employees during the months of lowest tourist traffic.

“A restaurant owner will always prefer to have a few tables occupied than none, and to have a few tables we need to keep our staff and our collaborators,” she said.

Outages Cut Daily Revenue

Flores Navarro said blackouts cost establishments when customers walk out without ordering and when food spoils after refrigeration fails. Such failures cut daily revenue by at least 15 percent, she said.

She added that the chamber has been seeking a meeting with the CFE (Federal Electricity Commission) to discuss fixes, noting that outages have destroyed equipment restaurants need to operate.

“We have sent requests and have been trying to get an appointment with the CFE so we can approach them and, above all, find out what solutions are available,” she said. “There are pieces of equipment that have been ruined for restaurant owners … they are equipment we need to operate and that break precisely because of these surges.”