Problems for Thai restaurants

[Gaybutton]

Despite the problems, I notice that the restaurants I like - good food, good service, reasonable prices - are still full with customers and restaurants that required bookings still do. If the restaurant is a good restaurant, people go.

I think it's the small mom-and-pop sit-down restaurants probably suffering most. Street food vendors, I believe, are doing well enough because they usually have a good repeat customer base and sell inexpensive food the average Thai can afford.

Years ago I read that the type of business most likely to fail is the restaurant business. I still remember being surprised by the type of business they listed as most likely to succeed - hardware stores.
_____________________

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.

by Kuakul Mornkum

June 27, 2025

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

Grim Outlook

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.

Bare necessities

"This year's Thai restaurant industry seems to be more challenging than during the pandemic," said Chanon Koetcharoen, president of the Restaurant Association.

He said that during the Covid crisis, food delivery platforms and various government economic stimulus schemes provided vital support to the restaurant industry.

But this year, concerns about global and local economic uncertainties are making people feel financially unstable, leading to more cautious spending habits, said Mr Chanon.

"People are dining out less frequently. For those who go out, they are ordering just what they need, not ordering extras like they used to," he said.

The decline is also linked to a drop in foreign visitors, particularly from China.

"Chinese diners have relatively high spending per bill," Mr Chanon said.

Additionally, he believes this year's fluctuating, rainy weather has led to less dining out as customers have been cancelling their reservations.

The rising costs of raw materials, including vegetable oil, pork and cooking gas, are increasing the burdens on this industry, Mr Chanon added.

As customers become more cautious about their spending, they might head to well-known restaurant brands and abandon lesser-known eateries, or those perceived as overpriced and struggling to attract new customers, said Panthip Deecharoen, chief executive at Betterbeam Food Co Ltd, operator of the Everyday Thai Tea brand.

Situation deteriorating

Ms Panthip said that during uncertain economic times such as the pandemic, many individuals who left their previous jobs saw "opening a restaurant" as one of the top choices for starting a business, and this trend significantly increased the overall supply within the industry.

She said that while new restaurants open, the chances of some closing down also increases.

"It's normal for some businesses to succeed and others to fail, it's simply part of the natural cycle," she said.

Additionally, Mr Chanon has seen that chain restaurants, which are traditionally located in shopping malls, are now opening more standalone eateries, creating additional challenges for small and medium-sized enterprises (SMEs) in the restaurant market.

According to K-Research, citing data from Line Man Wongnai, in the first quarter of this year, Bangkok saw a 4.8% increase in newly opened restaurants and beverage shops compared to the end of 2024.

Labour constraints

Ms Panthip has observed a labour shortage in the industry, leading brands to fiercely compete for workers and drive up costs.

She explained that fewer Thais are interested in working in the service industry, particularly in restaurants. At the same time, foreign workers now have more job opportunities, giving them more options.

As a result, salaries for both Thai and foreign workers are on the rise, often exceeding the minimum wage.

In addition, turnover rates have increased as workers have more choices.

To attract and keep employees, Ms Panthip's company is offering wages that exceed the legal minimum.

To encourage staff retention, the company is working on improving the workplace environment, outlining clear career paths for long-term employees, and providing training programmes.

Staying relevant

Despite the challenging outlook for restaurants and beverage shops, Ms Panthip believes that purchasing power in the high-income segment remains strong.

She expects this consumer group to shift from luxury products to healthier and more sustainable choices.

For Everyday Thai Tea, the company is exploring new menu items that offer healthier options or toppings.

To stay top of mind with customers during a highly competitive period, the company plans to focus on maintaining its existing customer base, while gaining new customers sustainably.

Strategies include maintaining consistent product quality by using a central kitchen for effective quality control.

In addition, the company is considering launching promotional campaigns, such as special offers for existing customers to encourage repeat visits.

Mr Chanon from the restaurant association suggested that the government should offer low-interest loan schemes to ease liquidity constraints for restaurants.

Moreover, he says the government should quickly implement the economic stimulus policies it has committed to.

Fine dining not so fine

Thitid Tassanakajohn, or "Chef Ton", owner of several restaurants including the Michelin-starred Le Du, talked about the boom of fine dining restaurants during the pandemic.

He observed many fine dining restaurants opening during that period, with some restaurants charging over 10,000 baht per person, and many of those restaurants have now shut their doors, he said.

This reflects the reality that Thai diners may no longer be willing to spend excessively, particularly under current economic conditions.

He believes the fine dining sector in Thailand has reached a saturation point.

"We're now in a correction phase, where supply and demand are being adjusted," he said.

Within the next 5-6 years, he estimated that only 50% of today's fine dining restaurants will survive.

He defines fine dining as restaurants with set menus starting from 5,000 baht per person.

Meanwhile, even awards and accolades do not guarantee survival, he emphasised.

"The key is to remain top-of-mind for customers and have financial resilience," he said.

He warned that fine dining growth is unlikely over the next five years.

"Anyone considering entering the market needs to think very carefully, it's a low-margin business," he added.

Chef Ton described the Thai restaurant sector as fast-moving like the technology industry. This constant change requires operators to be flexible and adapt quickly.

"A delicious meal is the fundamental, but for survival you also need a strong concept, media presence, and to create value and positive experiences for your customers," he said.

Trends can shift quickly, and while fine dining once enjoyed a surge in popularity, that excitement has dimmed. Today, many consumers are opting for premium but less expensive options.

Despite the challenges, his company plans to open three new restaurants this year, focusing on the mass and premium-mass segments. Two will be located in Thailand and one in Malaysia's capital, Kuala Lumpur.

"This is our direction for expansion," he added.

When asked about launching a new fine dining restaurant, his response was clear: "Right now, no way."

Tough time for all

Mr Thitid said that during this tough time for the industry, operators might find a better and leaner organisational structure.

"This does not mean laying off staff, but if you have multiple restaurants, it is essential to evaluate whether each business fits the current market environment," he said.

He cautioned against pursuing a different approach to expansion or investment right now.

"Now, everyone is waiting for the high season of this year," he said.

The authorities should bring foreign travellers to Thailand as much as possible, as at least it could help the country's economy, he added.

https://www.bangkokpost.com/business/ge ... r-eateries

[Dodger]

Too many Indian tourists.

Indians prefer eating their own food when they go to restaurants, and God knows there's enough Indian restaurants in Pattaya. If they're not eating Indian food they go exclusively to the cheap Thai food stalls, where the actual sit-down Thai restaurants are close to empty now.

If they did a survey of the Indian restaurants in Pattaya right now I bet their businesses are booming.

[Jun]

If they did a survey of the Indian restaurants in Pattaya right now I bet their businesses are booming.

They should be booming, considering the number and the size of the typical Indian tourist. They look like they eat way too much.

I don't know what time the average Indian tourist eats, but most of those Indian restaurants are empty during the day and early evening. One or two budget type places seem to be busy.
The Indian Restaurants that cater to farang customers seem to do OK.

[Gaybutton]

As long as we are talking about Indian restaurants, do you have a favorite? Mine is Tarka House.

[Jun]

Tarka House is definitely my favourite in Pattaya. Good food, sensible prices and deservedly popular with westerners.

However, since I have been staying in Jomtien, I've tended to eat at "Hot Curry Indian Food", in Rompho Market. The main course has always been very good. The starter was good on my first visit, but not quite as good on the follow up visits. I solve that issue by skipping the starter.

There was also an Indian buffet restaurant in the basement of The Royal Garden Plaza. The selection was a bit narrow, but for 200 baht, it was perfect for when I wanted a lunch without over indulging. Unfortunately, that has "Temporarily Closed". In Pattaya, temporary closures tend to be permanent.

[Dodger]

GB...Jun,

Where is Tarka House located?

[Gaybutton]

Where is Tarka House located?

https://www.facebook.com/tarkahouserestaurant/

Soi 13/4 - between Second Road and Beach Road in the city.

I have never actually been there. I order from them via GRAB and have it delivered. It always arrives quickly and the food is still piping hot. Among the many Indian food restaurants in Pattaya, Tarka House is my favorite and very reasonable prices too. Huge portions.

I guess this really belongs on the "Restaurant Reviews & Recipe Exchange" forum, but what the hell . . .

By the way, until he posted I had no idea Jun was also familiar with Tarka House. Turns out it is a favorite of both of us. That coincidence is quite an endorsement. I hope everyone who likes Indian food tries it - either going or ordering delivery. This is one restaurant I hope succeeds and stays succeeded.

[Dodger]

Soi 13/4 - between Second Road and Beach Road in the city.

Much appreciated.

Jai and I will be in the neighborhood next week and may give it a try.