After five years serving tropical fusion food and cocktails at Trail Bay Mall, El Segundo restaurant will close Jan. 12, as the owners pivot to a new model.
“It just isn't sustainable in its current form,” said co-owner Scarlet Osborne, Tuesday. Osborne highlighted reduced tourism (El Segundo’s critical summer season was down 25 per cent, as was their Brickers location) exacerbated by increasingly stringent short-term rental (STR) regulations, rising costs, a poor economy and the business’s significant debt carried from starting a business at the start of the pandemic. (Because it was new at the time, the business wasn’t eligible for the federal COVID relief programs.)
Osborne also commented that of the businesses of their scale that joined the lobbying campaign fighting the exclusion of new businesses from COVID relief funds, El Segundo was the last standing. “The operating climate for small business in B.C. has been brutal for the last five years,” she noted, pointing to the STR rules, the employer health tax and rampant inflation.
“I know that other hospitality businesses are also feeling the sting this year, but I do think that it's the perfect storm for a business like ours being unsustainable,” said Osborne.
Joining the chorus of hundreds of social media comments mourning the restaurant’s closure, Annie Wise, executive director of Sunshine Coast Tourism, shared her sadness with Coast Reporter. “They are super innovative,” she said. From the unique menu, the design and funky vibe, to jumping on programs as they came out –– such as outdoor seating –- El Segundo has been proactive, shared Wise. “They've been a really strong advocate for not just themselves, but for the entire restaurant hospitality community.”
“They’re the first to put their hand up and say, ‘Yep, we'll do that,’” said Wise.
The question of tourism’s impact is difficult to track, while short-term rental bookings in Sechelt were down about 30 per cent in 2024 from the previous year, total accommodation bookings are just down five per cent – which aligns with provincial trends (they don’t have full-year stats yet, just to about October).
While a litany of factors locally and globally affect travel and tourism, Wise does think it fair to say short-term rental policies have had a disproportionate impact on Sechelt’s visitor economy. Sechelt saw the loss of quite a few larger vacation rentals, said Wise, and while there are other types of accommodation in the community, that specific type of accommodation is preferred by families and some larger groups.
“We saw the loss of quite a few larger whole-home vacation rentals. So there's a gap now in available accommodations, especially in Sechelt and so the businesses that depend more specifically on those types of visitors have been hit the hardest,” said Wise. “That creates this ripple effect to not just the short-term rentals themselves, but to restaurants, tour operators, retail shops, their employees, their suppliers, and so ultimately, the entire community ends up feeling that pinch.”
To Osborne, there’s no doubt short-term rental regulations affected their business. She says they not only lost the tourists, whose hosts would regularly recommend their restaurants, but the hosts themselves have less money to spend on restaurants.
Wise reiterated it seems Sechelt was particularly hard hit last year. Early results from a Sechelt Downtown Business Association survey shared with Coast Reporter showed 10 of 24 respondents saw revenue decrease more than 10 per cent.
An outpouring of love and grief has flooded El Segundo since it announced its closure via social media Dec. 27, shared Osborne.
“We've been absolutely packed from the day that we announced,” she said. “We've had customers come in in tears, just saying, this isn't fair, it's not reasonable, the governments have let you guys down.”
She says since their announcement, she’s been hearing from other small hospitality businesses who are struggling and scared. “We have to support small business locally, or we just won't have it.”
Wise concurs. “I see and feel the community's disappointment at losing El Segundo,” she said. “I just really want to encourage everyone to rally behind these local businesses and dine out, go on guided tours, shop at local stores.”
Friends and family visiting Coasters make up 50 per cent of all Sunshine Coast visitors, noted Wise – so taking them out and showing them the town is an important way to support local businesses.
But while this is the end of El Segundo, the space will be reborn as a licensed cafe, to open in March. "Juno" (a nod to the largely female leadership and management of the establishment – and a nice name to boot), will have a strong focus on breakfast, brunch and lunch, in order to make it a more sustainable business model, said Osborne.
It will be counter service, as labour costs are much lower under that model. “Our full-service model is part of what the problem with our business was. It is just too high of a ratio of labour costs to the rest. And labour costs have gone up so much,” said Osborne.
Unfortunately, some of their staff will lose their jobs, but the new model will allow Juno to employ many of El Segundo’s core team. And many of those staff have been with Osborne and fellow co-owners Heidi Murphy and Jason Laidlaw since the business’s beginning.
“The only reason really that we can pull something like [opening Juno in March] off is our team. We have the most amazing team,” said Osborne. “They've all worked with us for up to four or five years. Pretty much all of them. They're strong. They're decision makers. They have our back so wholeheartedly.”
The new joint will have grab-and-go lunches, coffee drinks, cocktails, as well as a selection of hot food options. Osborne doesn’t want to give guarantees about what items may carry over, but at least one menu item will remain constant: Tommy’s Margarita. “It's just everybody's favorite thing.”
Over this weekend, customers are invited to wear something tropical and say farewell to what has become a favourite downtown eatery.
Those with gift cards to El Segundo need not fear, gift cards will be honoured at the owners’ other locations, Osprey (Pender Harbour), The Shed (Brickers), and The Shameful Tiki (Vancouver), as well as at Juno.
“We've done this as a prudent financial decision, and not because it's desperate,” said Osborne. “This isn't about failing, as much as it is about pivoting. It's all so that we can provide stability for our team.”
