From guesthouse to factory: Armenian entrepreneur adjusts to life during Covid-19

Journalist: Nelli Petrosyan, , Illustrator: Mananiko Kobakhidze
Edition: Transition
Topic: Environment

Martin Sargsyan, 29, had big plans for 2020.

This was going to be the year his family opened their guesthouse on their farm in Mets Sariyar, a village in Armenia’s north-west Shirak region. 

Sargsyan, a linguist by profession, spent three years working on the guesthouse, the first in the village. He got for approximately 20,000 dollars from the Integrated Rural Tourism Development Program and took classes to learn about the business.

The entire family took part in the process: Sargsyan’s father focused on the family’s long-standing beekeeping business, so his mother and his wife could dedicate their time to decorating the guesthouse and planning the menu. At the beginning of the year, the two-story, three-bedroom guesthouse was ready for tourists.

His family started to promote the guesthouse through social media and their honey business. The promotions and work started to bear fruit: by March he had 17 reservations, with the expectation of many more once the summer high season started. 

But then the pandemic struck. The government closed the borders and Sargsyan had to cancel the reservations. 

He says it is still painful to remember the early days of the pandemic, when the family slowly began to realize the season was over before it started.

"When the borders were closed, at first I thought that it would be short and would not seriously hinder tourism. But finally I realized that the year was gone,” Sargsyan says.

"A well-served customer leads to new customers. If we follow that logic, our loss will be enormous. At the moment, the expected income of about 2-3 million drams is no longer realistic. ”

Sargsyan’s family is far from the only entrepreneurs affected by the pandemic. 

"In the first quarter of this year, there were 311,000 domestic tourists, which is 14.6 percent less than in the same period of the last year. We predicted at least 10 percent growth for this year, but the epidemic prevented it,” notes Mekhak Apresyan, the president of the Armenian Tourism Federation. 

In addition, the country lost an estimated 350 million dollars from international visitors in the first half of the year. 

"The total income from tourism would have amounted to about 20 percent of budget revenue. All that money should have been spent in different branches of the economy. But at the moment, the tourism sector has lost all income,” Apresyan says. 

While the government has provided preferential loans for some businesses due to the pandemic—including freeing tourism-related businesses from profit tax for a part of the year, Apresyan says more is needed, especially for the tourism industry. 

"The biggest thing needed for the sector is missing: allowing businesses to use the soft loan to repay their current credit obligations,” he says, adding that the best option would be to allow businesses to stop paying interest for several months.  

The federation is in talks with the government and the economy ministry and is hopeful tourism-related businesses will be offered some reprieve from interest payments in the near future. 

In the meantime, the Sargsyan family decided to branch out and build a factory to earn money from their orchard while they waited out the pandemic. 

In addition to the family’s existing honey production, they will produce jams and dried fruits. Sargsyan says they have already applied for a co-financing loan from USAID. 

Sargsyan hopes that the small factory will help generate some income from the sale of food, until the virus is under control and tourists return to the country. Eventually, he wants guests to have the opportunity to participate in the process and learn how honey is made. 

Martin Sargsyan says the factory—and a planned in-house bakery—will eventually provide goods and agro tourism attractions for the guests at their family hotel.  

Martin notes that the factory investment was risky because the family is not receiving any income from the guesthouse yet. The family also does not qualify for any government assistance because the guesthouse had not officially started operating yet when the pandemic struck. 

"It is very difficult for the business in our status, because we do not receive support. When the epidemic started, we had to stop the process of registering the guest house too”.

Sargsyan notes that the owners of a number of affected businesses in Shirak region are now working on developing tourism in the area.

The new project has helped Sargsyan remain optimistic, despite the lost revenue this year. The most important thing, he notes, is that everyone stays healthy and keeps working for a better future. 

"We do not want to endanger our health or the health of our guests. If we become a virus carrier, we would pass it on to the next visitor and that would become a chain.”

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