Crunch time for eateries

Many Thai eateries are suffering even more than during the pandemic, with declining tourist numbers, a stagnant economy, and rising labour costs all pressuring the sector, writes Kuakul Mornkum

- Kuakul Mornkum

The Thai restaurant industry is battling significant headwinds this year, with some operators suggesting the forecast is even tougher than during the pandemic.

Kasikorn Research Center (K-Research) issued a projection last month, estimating the value of Thai restaurant and beverage businesses at 646 billion baht in 2025, up 2.8% year-on-year.

This prediction is a downgrade from 657 billion baht projected in December 2024, which would have meant 4.6% year-on-year growth.

The revision reflects uncertainty in Thailand's economic outlook, which poses risks to employment and consumer spending power, two key factors affecting the food and beverage sector.

Moreover, restaurant and beverage shop businesses are also impacted by the risks of a slowdown in the Thai tourism sector.

From Jan 1 to June 1, Thailand recorded 14.4 million foreign arrivals, a 2.77% drop year-on-year, according to the Economics Tourism and Sports Division of the Tourism and Sports Ministry.

While the number of domestic holidaymakers is expected to grow, some Thais may be more cautious with their travel spending.

K-Research forecasts full-service restaurants are likely to be affected by the current economic conditions, with total revenue projected at 209 billion baht in 2025, reflecting growth of 1.1%.

This modest growth is attributed to a reduction in dine-in frequency and lower average spending per bill.

However, buffet restaurants remain popular among diners, who view them as offering good value for money.

Limited-service restaurants are expected to reach a market value of 92 billion baht this year, a 2.1% increase, driven by the expansion of quick-service chains like fried chicken and pizza restaurants, according to K-Research.

Street food businesses with storefronts are projected to be worth 261 billion baht in 2025, reflecting 4.7% growth, due to their accessibility and affordable prices.

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