During 4Q21, the full-service restaurant business is being supported by two factors as part of the government's relaxation of various lockdown restrictions. They are the lifting of curfew in pilot tourist destinations under its reopening plan, and permission for restaurants to serve alcoholic beverages to customers, who are dining in their premises again under certain conditions, effective November 1, 2021. As a result, consumers are expected to dine out more and spend longer at restaurants. We at KResearch expect that the number of transactions (tables) at restaurants will increase 7 percent during the final two months of 2021, compared to an average figure reported during 10M21. Moreover, a longer dining time per each visit may allow customers to order more foods and alcoholic drinks, and this will likely allow full-service restaurants to earn an additional income of approximately THB2 billion over our prior estimate during the final two months of 2021, bringing the total sales of their foods and alcoholic beverages to roughly THB113 billion during 2021, representing a contraction of 28.5 percent YoY.
Looking into 2022, it is expected that the full-service restaurant business will be supported by specific measures, including the government's further easing of lockdown measures and reopening to international tourists. If the domestic COVID-19 situation improves or there is no resurgence of the COVID-19 pandemic that will prompt the government to reimpose lockdown restrictions, it is expected the full-service restaurant business will be able to rebound further after reporting a sharp contraction over the past two years.
KResearch sees two scenarios for the recovery in the full-service restaurant business: 1) If the COVID-19 situation improves, e.g., the number of new cases gradually declines, the government can meet its inoculation target, consumers in the country have more confidence in dinning out, and there is a steady increase in the number of international tourist arrivals due to the government's reopening efforts, it is expected that turnover in the full-service restaurant business may reach approximately THB143 billion, an increase of 26.5 percent YoY, and; 2) If there is a resurgence in COVID-19 and related containment measures are tightened, prompting the government to impose a ban on dining-in at restaurants, but there are no lockdown measures, it is expected that turnover in the full-service restaurant business will reach around THB129 billion, an increase of 14.2 percent YoY.
Despite improvements foreseen in the restaurant business, operators are advised to have contingency plans in place to brace for several challenges such as higher operating costs that are being driven by rising food ingredient, utility, rental and labor expenses, plus those related to maintaining hygiene standards and disease screening. Such factors are expected to pressure their profit margins, income, liquidity and financial positions, particularly those encountering a liquidity squeeze and financial burden from loans that are expected to be their obligations over the near future.
Annotation
This research paper is published for general public. It is made up of various sources. Trustworthy, but the company can not authenticate. reliability The information may be changed at any time without prior notice. Data users need to be careful about the use of information. The Company will not be liable to any user or person for any damages arising from such use. The information in this report does not constitute an offer. Or advice on business decisions Anyhow.