KResearch projects that Bangkok residents' spending during the 2021 Songkran festival will amount to THB 24 billion, a 4.0-percent contraction compared to Songkran in 2019 (excluding 2020, when the holiday was postponed). Tourism expenditure and travel costs for hometown trips may be particularly affected by rising unemployment while a number of people made their homebound trips earlier. Nonetheless, stimulus packages issued by the government to encourage spending in the food and beverage industry have partially boosted spending in spite of unfavorable changes in Bangkokians' spending behavior amid the ongoing COVID-19 crisis.
Although the government's stimulus packages have been issued to ease financial burdens and improve the general public's purchasing power during the Songkran festivities, only certain types of products, especially food and beverages are set to benefit from the schemes. Meanwhile, other activities including interprovincial journeys and shopping continue to face grim prospects as most city dwellers adopted a cautious stance by cutting spending due to their concern over future earnings. In general, the amount of spending on most activities is expected to decrease from the levels seen during the 2019 Songkran festival, with hometown trips and domestic tourism likely to see the biggest contraction. As purchasing power remains fragile, spending on shopping is expected to remain subpar – whereas foods and beverages may continue to see growth under the government's rollout of stimulus checks/may only be supported by the government's stimulus efforts.
KResearch views that food and beverage operators who have efficient management in place, strictly adhere to public health standards and focuses on promotional pricing strategy should be able to increase consumer confidence and maintain their sales turnover during the festivities. Focus should be on online food ordering for on premise pick-up, table reservations, queue management, increased sanitation within restaurants, appropriate seating arrangements and promotional pricing as consumers have tended to purchase food and beverage as takeaways to reduce the time they spend outside of their homes.
Despite the Songkran holiday, the retail sales outlook for full-year 2021 remains bleak, as Bangkokians are still cautious about their spending, focusing mainly on value for money. After the stimulus packages come to an end, businesses will face the challenge of strategizing new promotions and steadily building consumer awareness to generate increased sales. That said, close attention should be paid to new stimulus packages that are expected to surface over the remainder of the year.
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