An employee at AGROnet

COVID Wreaks Havoc on Businesses in Armenia

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By Armen Festekjian

Special to the Mirror-Spectator

YEREVAN — With now more than 39,000 coronavirus cases and more than 700 deaths according to the Ministry of Public Health of the Republic of Armenia, the country continues to fight to reduce their numbers and restore safety and health through restrictions and other protective measures.

All are required to keep social distancing rules and nearly everyone above the age of 6 is required to wear a mask in public spaces and in vehicles of more than one person. Businesses were allowed to reopen starting May 4, 2020 after the state of emergency announced on March 16, 2020 that required schools, universities, and businesses to close.

Small businesses, cafés, restaurants, and hotels struggle to remain open amidst rising numbers of cases, restrictions on the public, and new safety measures.

“The purchasing power of the Armenian people has reduced,” claims Sebouh Mardirossian co-founder of AGROnet, a small business connecting Armenian farmers to the hospitality industry. AGROnet received 300 dollars in government assistance but needed much more. While many businesses were required to close during the initial lockdown starting March 16, food related organizations remained open. Since the onset of the pandemic, AGROnet has had a 65-percent reduction in sales. Due to the closure of borders with neighboring countries and restrictions on travel, informal importation stopped altogether and formal import prices increased. Only containers and big trucks were able to move through.

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There was one month where AGROnet needed to have a document to permit transportation. Although there were many downsides to the restrictions on travel, traffic was lighter in Yerevan and deliveries moved faster for farmers.

In addition, wages in the greenhouses have fallen, and it has often been more economical for the vegetables to be thrown out rather than to be delivered to stores and restaurants with lesser prices.

“Farmers are losing their jobs. They have no business and they don’t have other options,” said Mardirossian.

Best Western Plus Congress Hotel

While the prices of food items have remained stable for the general public, the price of food has collapsed for farmers delivering to restaurants. “They are throwing their food away.”

Before the pandemic, Chinese cabbage had been a new item in high demand for some restaurants and burger joints and therefore many farmers are now growing the cabbage. However, now that home cooked meals have become the norm for Armenians, such items that are not popular with home cooks, rather than restaurants, are being thrown out.

“They have to destroy their lands,” Mardirossian said.

Many farmers who are out of business are using this time to cultivate their lands with new crops in preparation for the possible recovery of the market. They hold on to the hope that the economy will start up again.

During the initial lockdown, restaurants and food stores remained open only for delivery, and employee temperatures had to be tested two times per day.

When restaurants opened for customers, all restaurants had to check the temperatures of guests. For some stores however, reports one citizen, “Frankly speaking you can consider the thermometer as a decorative item in the store.”

For food stores such as the Syrian-Armenian VS Food Stuff, there was a steep fall of sales for the duration of lockdown, which recovered afterwards. With already strict sanitary measures in place for food stores, VS Food Stuff sells most packaged products with no direct contact with the food. The only novel measure was to frequently sanitize hands with 70-percent ethanol.

Many restaurants are registered with Menu.am, the Armenian version of home food delivery service.

While DoorDash typically takes a 20-percent commission from restaurants, Menu.am takes 25 percent. Some restaurants can afford the high commission, however Armenians are generally not fond of the delivery service. Most Armenians prefer to see what they are buying.

“Social life has been harder because everyone is very careful to make contact with others,” reports Mardirossian. Though the pandemic has helped people spend more time with family, there are fears of even stepping in a hospital for a mild illness because of the potential risk at clinics and dentists. While Mardirossian and many others do not shake hands, the younger generation is not so cautious. Mardirossian is ready to take vaccine for himself and his family but is not sure that everyone will agree to get vaccinated once one is created.

“There is a big anti-vaccine temperament. It’s not ridiculous for Armenians not to take the vaccine. Many people believe it’s a fake pandemic. You don’t see any distancing or masks being worn in the villages of Armenia,” he said.

From Hotels to Hospitals

During the lockdown, many hotels were converted to hospitals. Best Western Plus Congress Hotel was not forced to be closed by the government and refused to be converted to a hospital for the sake of the health of future guests. The hotel has implemented new procedures of cleaning, sanitizing, and disinfecting which are strictly followed by all their departments. Hotel staff socially distance, wear masks and gloves, periodically disinfect their hands with hand sanitizers, and also provide guests with individual safety kits which include masks, gloves, and instructions on staying safe amidst the pandemic.

It was noticeable that at the beginning of the lockdown many people were not wearing masks and gloves because they had a skeptical attitude towards the virus, however after restrictions were put in place by the government many people started to use them regularly. Most buildings later have stations that provide masks and gloves which became a requirement to put on to have access to the building.

On March 16, the government prohibited events of more than five persons in attendance, implemented screening and quarantine measures, and restricted entry into Armenia. Many of the hotel’s events were cancelled because of the restrictions in place, however, their solution was to split the number of people for the events by days.

Although the removal of restrictions did not do much to help the hotel rebound completely, the hotel was able to reopen their Accent Restaurant and Bar.

The closure of borders and the restrictions in place until August 12 seriously impacted the hotel and resulted in an obvious lack of tourism and many canceled reservations. Employees impacted by the virus received financial support from the government though there is no information about any additional help from the government. The most devastated part of the business is bookings, as they have no guests from abroad, their usual clients.

In response, the hotel has begun to switch their focus to local guests and create packages specifically for them. While many hotels are closed, Hotel Congress is still active. Their main visitors now are guests at the pool where there are restrictions implemented by the government. Hotel rooms that are booked are closed for three days subsequently to be deep cleaned and disinfected so that guests can be assured that the hotel is doing its best to protect its guests.

Reezalt Creative Labs

Located in the city center just 2 kilometers away from Hotel Congress, Reezalt Creative Labs is a creative advertising agency for that works with more than 100 brands. It took a big hit due to the hotels being converted to hospitals.

“There were many banners for giving up property for rent,” reports Sirarpi Ghasabyan, CEO of Reezalt Creative Labs. “The whole street was putting them up.”

Reezalt Creative Labs had more than 5-6 hotels as clients that had to leave their agency.

Luckily their team is small, consisting only 10 people.

“We are a small business and our amenities have allowed us to keep that distance of 1.5 meters” between co-workers, she said.

Reezalt Creative Labs does not meet with most clients physically but with the ones who need to meet with them in person, they do so as carefully as possible, with no physical contact, while wearing masks and keeping social distance.

The lockdown itself “was complete nonsense because everyone was out,” said Ghasabyan. “It hurt the economy and it didn’t have any effect on the spread of the virus. No one was charging you for not wearing a mask. It was like a 2-month holiday for Armenians.”

She added, “If everyone follows the rules, we can eliminate it.”

Employees must wear masks, even in the office, reported Ghasabyan, but employees do not wear masks during work time but still keep social distancing and have doors and windows open.

Before the pandemic, Reezalt Creative Labs provided digital advertising for hotels and social media marketing. However, there was a 20-30 percent loss due to lack of service and closure of hotels. For example, they lost contracts with some due to budget cuts of hotels and their conversion to hospitals. Due to the rising of tourism in Yerevan, “there are a lot of businesses that are being opened and a lot of tourists and companies could afford good marketing and good advertisement and now since COVID, they couldn’t afford this marketing.”

However, some clients, such as the Fashion Design Chamber of Armenia, joined during the spread of the virus due to the fashion shows going online rather than being in person. “All fashion shows became online, even London Fashion Week. To increase awareness of what they were doing, Fashion Design Chamber started cooperating with us and used social media to talk about their activities. They had a budget because they got sponsorship from British embassy of Armenia so they could take selective designers,” said Ghasabyan.

As for the closure of borders, “it is not an impact you can easily see,” said Ghasabyan, because lack of rest and proper vacation has a gradual effect on employees.

“Vacationing in Armenia is very expensive. If you want to get some rest, Georgia is the best alternative. Many people could afford traveling there because it’s cheap, but now you can’t even do that. People are tired because of the stress, and it has had an effect on people’s moods which affects business long term.”

The biggest difficulty for Reezalt Creative Labs was organizing jobs online. As for her business during the lockdown, the team was working from home and following the rules. “In our industry, discussion and brain storming is very important,” said Ghasabyan. Doing it online “wasn’t as productive as doing the brain storming together.”

After the lockdown and after transportation started working, they came back to the office. It would have been difficult to have come to the office without transportation and have to pay taxes so employees could come to the office. Nonetheless, during the time transportation was inactive, “you still have to pay for rent, whether you decide to come to the office or not.”

Despite difficulties, Reezalt Creative labs did not have to layoff any employees.

“It was very important for me that everyone keeps their job.” The assistance from the government was small. For every five employees you receive the average of their salaries once monthly. Reezalt received money three months consecutively. “It was really nothing. We are a small business and every single employee has to pay 26-percent income tax. At least they can reduce the income tax.”

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