News and Facts about Cuba

Cuban restaurateur learns capitalism the hard way

Cuban restaurateur learns capitalism the hard way

'Las Margaritas could turn out to be my dream — or maybe my nightmare'
By Mary Murray Producer
NBC News
updated 5/5/2011 11:04:52 AM ET

HAVANA — When Cuba's Communist government recently eased restrictions
on "mom and pop" businesses, Rolando Hernandez decided to pursue his
lifelong dream of starting a small .

Regrettably, he never learned the business axiom "location is everything."

Hernandez sunk his life savings into the business, even selling some of
his personal belongings such as his computer, TV and his living room
furniture to raise the start-up capital. In February, the 46-year-old
waiter quit his job and opened Las Margaritas, a family-style restaurant
in Habana del Este, a working-class neighborhood in Havana where
Hernandez has lived most of his life.

The restaurant is one of the few operating in Habana del Este, so
Hernandez thought that alone would work in his favor.

"I imagined business so brisk that no one here would have the time to
sit down," he said.

Unfortunately, sitting down is basically what Hernandez's employees find
themselves doing most nights. Business perks up a bit on Saturday and

The restaurant boasts an intimate dining room, pleasant and tastefully
decorated, with a large, clean kitchen full of experienced staff. Like
Hernandez, everyone else working at Las Margaritas recently quit their
jobs working in state-run hotels to try their luck in Cuba's private
sector. The few customers who have been to the restaurant report that
the is good and the portions are generous.

Hard lessons in capitalism
So what, Hernandez asks, is he doing wrong?

When he has a little more money, he plans to put a sign up outside the
building. At this point only a psychic or someone with a great sense of
smell could venture to guess there was a restaurant behind his wooden doors.

As far as advertising goes, there isn't any. Even if he had the money,
there are no independent newspapers or radio stations in Cuba where a
restaurant like Las Margaritas could place an ad. So, Hernandez relies
mostly on word of mouth.

The restaurant has also only been open for two months – admittedly a
very short period of time for a startup to see a profit. Still,
Hernandez said he expected to recover his initial by now.

Possibly the biggest challenge to Las Margaritas' success is its
location. Habana del Este lies east of Havana's harbor, miles from the
city's zones, and Las Margaritas is squeezed in between square
Soviet-style apartment buildings, constructed after came to
power in 1959.
Advertise | AdChoices

No money to go out
The neighborhood is home to working people like Lidia Nunez, who scrimps
by on a nurse's salary. For most, it takes a special occasion for a
family to spend their hard-earned wages eating out.

Like a daughter turning 14. Nunez said she saved for two months to have
the money to splurge on a modestly priced birthday meal.

That takes a certain kind of sacrifice, but you hear stories like that
all the time in Cuba.

For the last 20 years, the loudest complaint many Cubans have had is the
inadequacy of their paychecks. On the books, people are earning more
than ever before, but in reality, the Cuban peso buys less than it did
two decades ago.

After the Cuba went into a free fall, from 1989 to 1993, the
level of what's called "real" wages collapsed – those are wages adjusted
to inflation rates. Research by Cuban economist Pavel Vida found that
while real wage levels began to steadily increase after 1994, people
continued to seriously struggle to make ends meet.

Today's real incomes, Pavel estimates, hover just around a quarter of
their 1980s levels – making it all the more astonishing that a single
mom like Nunez would ever be able to save enough to treat her daughter
to a birthday meal.

Nunez calls that resourcefulness.

The same kind of resourcefulness that sent Hernandez back to his
business plan when business was too slow for his liking.

Now, in addition to offering formal dining, Las Margaritas has a scaled
down take-out menu more in line with what his customers may be able to

"Las Margaritas could turn out to be my dream or maybe my nightmare,"
Hernandez says with a shrugs. "Only time will tell."

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Follow Us
Visit Us On TwitterVisit Us On FacebookVisit Us On Google PlusCheck Our Feed
May 2011
« Apr   Jun »
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31  
Donate for Servers
We run various sites in defense of human rights and need support to pay for more powerful servers. Thank you.
Cubaverdad on Twitter
Tweets by @Cubaverdad