Thaniwan Kulmongkol, president of the Thai Restaurant Association, said many restaurants have been unable to adapt to the changing market dynamics. Those clinging to traditional business models are finding it increasingly difficult to compete with more modern rivals and manage costs effectively, leading to losses and eventual closure.
The situation has become particularly worrying for larger restaurants and those reliant on social gatherings such as retirement parties. Bookings for such events have decreased significantly, causing a substantial drop in revenue.
Even high-end and award-winning restaurants, including those with Michelin stars, have seen their revenue plummet by 40%.
Despite these challenges, TTB Analytics projects the overall restaurant market in Thailand to be worth THB669 billion (US$20 billion) in 2024, indicating potential amidst the intense competition.
Lineman Wongnai, the No.1 e-commerce platform for service in Thailand, reported that over 100,000 new restaurants opened in the past year, a 13.6% increase, bringing the total number of restaurants in Thailand to 680,190. However, about 50% of restaurants closed within the first six months.
While overall purchasing power has declined, Thai people still maintain their habit of eating out, particularly working-class individuals who value a comfortable dining experience. However, economic pressures have led consumers to opt for more affordable options.
To navigate the current crisis, Thaniwan urged restaurateurs to embrace technology, such as online marketing, inventory management, and online ordering. Differentiating themselves through unique food offerings or attractive atmospheres is also crucial for attracting customers.
Effective cost control and a deep understanding of consumer behaviour are essential for developing products and services that resonate with the market, she said.
While the future of the restaurant industry presents significant challenges, Thaniwan remains optimistic about its long-term prospects, driven by the food consumption habits of Thailand’s 60 million population and the influx of foreign tourists.
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