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5 Jul 2021


Restaurant business 2021 likely to suffer THB 55 - 70 billion in lost revenue compared to previous year amid rampant COVID-19 outbreak (Current Issue No.3237)


With the recent wave of COVID-19 in Thailand, the number of daily cases has surged in many areas, particularly the Bangkok Metropolitan Region (BMR), which is categorized as a zone of maximum and strict COVID-19 control. This development has prompted the government to raise COVID-19 control and prevention standards. Once again, restaurants have been forced to halt on-premise dining, offering only takeaway and delivery service over a 30-day period. On June 29, 2021, the Thai Cabinet approv​ed a measure to pay compensation to the workforce to reduce the impact of COVID-19 on businesses and provide assistance to both operators and employees. The scheme will cover all provinces that prohibit dining in restaurants, including Bangkok, Nakhon Pathom, Nonthaburi, Samut Prakan and Samut Sakhon. Additional measures such as the co-payment scheme are also under consideration.

Nonetheless, the current COVID-19 outbreak will likely have a severe impact on restaurants, especially full-service restaurants. With regard to this factor, KResearch has lowered its forecast on the total value of restaurants in 2021. The direction of Thailand's restaurant business can be divided into two scenarios, as follows: 1. Base-case scenario: The government is able to rapidly bring the COVID-19 outbreak under control and restaurants in the BMR can reopen for dine-in service as usual. The total value of restaurant business in 2021 would reach THB 350 billion (-13.5 percent YoY); and 2. Worst-case scenario: The risk posed by the potentially widening reach of COVID-19 infection will prolong the recovery of the restaurant industry which will deal a severe blow to restaurateurs over medium term. Restaurant operators in this case would stand to lose THB 70 billion (-17.3 percent YoY), with business turnover of only THB 335 billion.

Since organizational structures differ between restaurants, KResearch perceives that the government may offer restaurateurs additional assistance to deal with other operational issues such as rents and utilities expenses. Going forward, new measures may be gradually released to lessen the impact on restaurants beset by surging cost burdens.