Economy Rising Costs Threaten Thailand's Once-Thriving Restaurant Scene

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Photo courtesy of Socialgiver

 

Thailand's restaurant scene is in crisis, grappling with soaring costs, dwindling patrons, and lacklustre tourism. The once-thriving industry now faces potential collapse, as daily revenues fall over 50% according to the Thai Restaurant Association.

 

"Restaurant owners are under immense pressure," stated Line Man Wongnai CEO, Yod Chinsupakul.

 

Foot traffic has sharply declined, with same-store sales dropping 14% from 2024 to 2025, compared to a modest 3% decrease the previous year. Although food delivery grows, predicted to account for 29% of sales by 2025, it remains insufficient to bridge the revenue gap.

 

The Kasikorn Research Centre has downgraded its 2025 food and beverage growth projection from 4.6% to 2.8%, estimating a market value of 646 billion baht (around £14.6 billion), down from an earlier estimate of 657 billion baht.

 

Adding to the woes, raw material costs have surged by 25%, labour wages by 5%, and Chinese tourist arrivals—once a buoy for the industry—remain slow.

 

New restaurant openings have drastically halved, from 96,000 in early 2023 to just 44,000 this year, with predictions that half will shutter within a year.

 

To navigate this storm, Yod proposes a four-pronged strategy:

 

1. Embrace Technology: Digital ordering and cashless payments are increasingly favoured, with QR code and e-wallet usage 32% higher per transaction than traditional cash payments.
2. Scalable Models: Quick service restaurants (QSRs) are a viable path forward. "Full-service dining is fading. Brands like Suki Teenoi show how growth can be achieved," observed Yod.
3. Financial Acumen: With most restaurants as sole proprietorships, proper bookkeeping is often lacking, complicating funding and technological adoption.
4. Government Intervention: Yod highlights the need for targeted tax breaks and support schemes to aid small and medium-sized enterprises in adapting and expanding.

 

Despite the grim outlook, some sectors thrive. Affordable speciality coffee sales in Bangkok have surged by 46%, with delivery comprising 22% of their revenue. Matcha is also popular, experiencing a 28% growth.

 

Without strategic shifts and support, the future of Thailand's restaurant industry remains precarious. The coming years demand innovative resilience from restaurateurs if they hope to revive this crucial segment of the Thai economy.

 

  Adapted by ASEAN Now from The Thaiger 2025-07-22