THAILAND – The restaurant industry in Thailand is grappling with a severe crisis as more than 600,000 establishments have closed down in the past three years due to economic strain, according to the Thai Restaurant Association (TSA).
In an interview with local newspaper Thansettakit, Thaniwan Kulmongkol, TSA’s President reiterated the need for restaurant operators to change their business models to cope with the challenging landscape.
According to TSA’s President, many restaurants in Thailand have closed down due to a combination of economic slowdown, rising costs, competition and declining consumer spending.
Kulmongkol quoted data from the Ministry of Commerce, that reported 100,000 new restaurant openings in the past year, a 13.6% increase. However, half of these new establishments closed within the first six months of operations.
This trend was replicated in 2022 and 2023 financial year, reflecting a significant crisis in the sector resulting in the 600,000 reported closures in the past three years.
She reiterated players need to prioritize managing their costs more effectively and evolve their offerings to meet customer demands. However, the President asserts this has been a hurdle for many restaurants in Thailand.
The TSA President said, “Effective cost management and a profound understanding of consumer behaviour are crucial for developing products and services that resonate with customers.”
“With Thais consuming at least three meals a day and international visitors eager for genuine Thai flavours, the restaurant sector continues to have significant demand. Entrepreneurs who innovate and adapt will find themselves well-positioned for long-term success.”
The current challenging situation is especially difficult for larger restaurants and those reliant on social gatherings, whose bookings and revenues have has significantly dropped in the past three years.
Award-winning and high-end restaurants like Michelin have recorded revenue decline of up to 40%.
She also urged players in the sector to align themselves with current trends including the alternative ingredients, sustainable packaging, AI-driven innovations, and a shift towards more delivery and takeaway services, as she predicts the Thai restaurant scene is set to undergo substantial transformations.
Other technological innovations like technological solutions such as online marketing, inventory management, and digital ordering systems are also crucial for the sector.
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