Thailand’s food scene, once a bustling hub of culinary experimentation and vibrant dining experiences, is simmering in distress — and not just in the kitchen. The pressure cooker of escalating expenses, a dwindling stream of diners, and lukewarm tourism has thrust the Thai restaurant industry into a precarious state. With more than half of the daily revenue vanishing into thin air, restaurateurs are feeling the squeeze. Yod Chinsupakul, CEO of Line Man Wongnai, underscores, “Restaurant owners are facing intense pressure.”
The once lively chatter in dining rooms is being replaced by an eerie silence. The numbers paint a grim picture, with same-store sales taking a nosedive by 14% between 2024 and 2025, compared to a relatively small 3% dip the previous year. Even though food delivery is stepping up to the plate, with forecasts to jump from 25% of total sales in 2023 to 29% by 2025, it still doesn’t patch the financial gap. The Kasikorn Research Centre’s downgraded prediction for the food and beverage sector from 4.6% growth to a mere 2.8% is a bitter pill to swallow, forecasting the market’s worth to be 646 billion baht, a step down from the prior 657 billion baht estimation.
Adding fuel to the fire, the restaurant industry is grappling with a steep 25% rise in raw material costs and a 5% increase in labor wages. Meanwhile, the influx of Chinese tourists that once nourished restaurant foot traffic has slowed to a trickle. New restaurant launches are taking a hit too, plummeting from 96,000 in early 2023 to a meager 44,000 this year, with the grim forecast that half might close shop within a year.
Faced with the heat, Yod recommends a four-pronged survival strategy. First, dive into technology. The demand for digital ordering and cashless payments is skyrocketing, with QR codes and e-wallet transactions gaining a 32% lead over traditional cash transactions. Next, pivot to scalable dining models like Quick Service Restaurants (QSRs). “The golden era of full-service dining might be fading, but brands that are ready to expand, like Suki Teenoi, demonstrate how robust growth can be achieved,” Yod notes.
Thirdly, it’s time to get serious about financial data. A striking 96% of restaurants operate as sole proprietorships and many neglect robust bookkeeping, a hurdle in securing funding or integrating new technologies. Lastly, Yod emphasizes government intervention, calling for targeted tax incentives and support programs to help small and medium-sized eateries withstand and expand.
Amid the overall dim outlook, there’s a silver lining brewing in the coffee sector. In Bangkok, the affordable specialty coffee sector (priced under 100 baht) is perking up with sales ascending by 46%, and deliveries bubbling to 22% of revenue. Moreover, matcha is making waves, with shops recording a spirited 28% growth.
The evolving scenario of Thailand’s restaurant landscape is certainly a dish with various flavors — some challenging and others bursting with hope. While traditional dining might be on a simmer, the adaptability and resilience of restaurateurs, complemented by strategic tweaks and support systems, hint at a recipe for potential revival.
The situation for restaurants in Thailand is dire. All these issues combined almost seem like a death knell for the industry. Can this be just a phase before things get better?
I sure hope it’s just a phase. But with the rising costs and dwindling tourism, it’s more likely that restaurants need to innovate or go under.
Innovation sounds great on paper, but I wonder how realistic it is for small family-run establishments. They need serious help from the government or local communities.
Blaming tourists for dwindling numbers is a bit short-sighted. Thai cuisine is world-renowned, locals should be leading the charge in supporting their own culinary culture.
Is nobody talking about how frivolous this inflation on food and wages really is? There’s surely a bigger economic manipulation here at play.
Not everything is an economic conspiracy, CJ. Supply and demand make things more expensive. That’s just the reality.
Sal, it’s not just supply and demand. There’s a profit motive from suppliers too. They squeeze everyone down the line.
The shift to Quick Service Restaurants doesn’t quite capture the full joy and essence of Thai dining, but if that’s the way to survive, so be it.
It’s sad that we might be witnessing the end of an era for full-service Thai dining. Adapting to QSRs might be practical but it’s definitely not the same experience.
Couldn’t agree more. The charm of Thai food is as much in the experience as it is in the flavors.
Digital ordering and e-wallets are brilliant! It’s about time more restaurants catch up with technology. I’ve seen it work wonders elsewhere.
Absolutely! It’s already standard in other countries. It streamlines service and enhances the customer experience dramatically.
While it’s convenient, not everyone in Thailand is tech-savvy. There must be provisions for less tech-comfortable patrons too.
I love hearing about the growth in the coffee and matcha sectors. Aren’t these trends like a blueprint for how innovative approaches can save other parts of the culinary scene?
You’re onto something. Diversification might be key. Coffee is an interesting bridge between traditional and trendy.
Government intervention might sound good, but it often comes with red tape. Can they actually provide efficient support?
Agreed. In many cases, government programs take so long to implement that the window of opportunity closes on struggling businesses.
The shoutout to Suki Teenoi is interesting. Somehow they thrive while others close. Maybe restaurant owners should take notes from success stories.
I can’t believe tourism is down. Thailand is such a beautiful country. What changed?
Post-pandemic travel dynamics and competition from other tourist destinations play a huge factor, Sam. People have so many new options now.
Thanks, Jules. I hope Thailand reinvents its tourism strategies soon. It’s too special a place to be left behind.
Discounting financial data might be one of the craziest things small businesses can do. Data is power, should be obvious by now.
True, yet running restaurants day-to-day leaves little time for thorough financial analysis. More support training on this could help immensely.
There’s still hope for Thai cuisine! As long as there’s passion and innovation in the kitchen, the flavors of Thailand can find a way.
Scaling efficiently isn’t just about tech or quick dining solutions. Long-term loyalty programs could support repeat business in tough times.
Adjustments in the form of smaller menus and smarter sourcing might also alleviate pressure. It isn’t just about tech or discounts.
Yes! Restaurants could save and focus on quality over quantity. Less food waste and better customer satisfaction.