According to many restaurant owners, the mounting economic pressures and lack of clear government policy have made Pattaya and Bangkok increasingly challenging places to sustain a business — and less welcoming destinations for tourists. (File Photo) PATTAYA, Thailand – Behind Pattaya’s glittering façade of beach bars and bustling night markets lies a quieter, more painful collapse — one hitting the city’s restaurants with a ferocity most tourists never see. According to Sorathep Rojpojjanarat, President of the Restaurant Operators Association, the second quarter of 2025 has been even more devastating than the first for Thailand’s food and beverage industry. Restaurant closures now rank among the top three types of business shutdowns nationwide. What began with low-end eateries has now reached mid-tier and SME-level establishments — including those in tourist hotspots like Pattaya. “You can see ‘For Sale’ and ‘Takeover’ signs everywhere — even in once-busy tourist zones,” Sorathep lamented. Restaurant owners in Pattaya are particularly vulnerable. Once reliant on a steady stream of both local and foreign customers, they now face a perfect storm: shrinking domestic spending power, a 14% overall drop in tourist arrivals, and a staggering 35% decline in Chinese visitors. The pressure doesn’t stop at dwindling foot traffic. Soaring ingredient prices, rising utility costs, and persistent inflation have shortened the average restaurant survival window. “It used to be that 60% of restaurants closed within a year. Now, many can’t even make it past six or seven months,” Sorathep said. Cost spikes in staples like palm oil, sugar, electricity, pork, vegetables, and eggs have pushed many operators past their limits. And as more restaurants shut down, ripple effects are felt across the entire supply chain: market vendors, kitchen staff, delivery drivers, and tuk-tuk operators all face fewer jobs and shrinking incomes. Restaurant owners say that mounting economic pressure and ongoing policy uncertainty are making Pattaya not only a harder place to run a business — but an increasingly frustrating place to visit. “Despite repeated warnings since late 2024, we’ve seen no meaningful policy support from the government,” Sorathep added. “There’s no long-term tourism integration plan, just more short-term concerts and flashy events. The cracks are now too deep to paper over.” The concern is no longer just economic collapse — it’s the threat of a broader social crisis. As restaurants close and layoffs spread, joblessness may soon give rise to instability. In Pattaya — where tourism is both lifeblood and illusion — the quiet collapse of its restaurant scene may be the loudest warning yet. Severe Impact on Restaurant Businesses Ms. Thaniwan Kulmongkol, President of the Thai Restaurant Association, highlighted that 2025 has been filled with negative factors hitting the restaurant industry hard. These include the heavy impact of Thailand’s and the global economic downturn, along with a decline in foreign tourists, which has reduced consumers’ spending power. The shift has also affected sales opportunities for restaurants in tourist areas, compounded by the relocation of various industries out of Thailand, which in turn reduces special occasions like celebrations or post-work gatherings that typically drive restaurant visits. Consumer behavior has noticeably changed as well, with fewer visits and smaller, less expensive orders. For example, customers who used to dine out 4-5 times a week now do so only about once a month. Order sizes have shrunk from five dishes to three, and drink choices have shifted from smoothies and specialty beverages to plain water or soft drinks. Even buffet restaurants, while maintaining customer numbers, suffer as spending per person drops sharply—customers who once paid 1,500 baht per package now opt for 700 baht alternatives. “The early onset of the rainy season this year has further dampened business,” Thaninwan said. “Some restaurants struggle even before setting up in the evening because of continuous rain for several hours, which kills sales.” All these negative factors have hit revenues hard, especially profits from drinks, while costs like rent, energy, labor, and ingredients remain stable or rise, squeezing profit margins by as much as 50%. Sorathep warns that despite repeated warnings since late 2024, the government has offered no meaningful policy support, focusing only on short-term events while deeper tourism problems remain unaddressed. New and Small Players Hit the Hardest Thaniwan noted that these challenges have forced many, particularly new or small operators with limited cash flow, to tighten their belts by avoiding new hires, controlling ingredient costs, cautious investments, and even closing some branches during the low season, hoping to survive until demand recovers during the year-end high season. Established or larger operators with accumulated cash reserves are less affected. Meanwhile, the government has yet to offer targeted support to restaurant operators, unlike during COVID-19 when low-interest loans, tax breaks, and rent exemptions were provided. She stressed that any support now must be direct and swift because restaurants have far smaller cash reserves compared to airlines or hotels and cannot wait months for subsidy approvals. Research from Kasikorn Research Center estimates the current value of Thailand’s restaurant industry at 572 billion baht, split among full-service restaurants (213 billion baht), limited-service restaurants (93 billion baht), street food (266 billion baht), and beverage and bakery outlets (85.3 billion baht). Restaurants Struggle to Survive Amid Rising Costs and Shrinking Demand Somsak Rarongkam, President of the Thailand Chef Association, revealed that the restaurant industry in 2025 continues to face serious challenges. Despite hopes for recovery, rising costs—including labor, raw materials, cooking gas, and other expenses—combined with declining purchasing power, are expected to slow industry growth by 3-4% compared to last year. Budget eateries are particularly vulnerable to these pressures. There are currently over 700,000 restaurants nationwide, with market stalls and street food vendors among the most at risk. Even with lower rent costs, many stalls struggle due to low foot traffic, leaving only cafes managing to maintain some sales. As costs increase while consumer spending falls, price competition intensifies, making survival even harder. Additionally, deep-pocketed foreign brands from China, Korea, and Japan are entering the market, adding further pressure on local businesses. Buffet restaurants face tough challenges as well, with costs making up roughly 65% of their per-person price. For example, a premium buffet priced at 1,200 baht per person must attract about 200 customers daily to break even—a difficult target. Cutting costs by reducing ingredient quality is often not feasible. Fine dining and Michelin-starred restaurants, which offer full-service meals including drinks and desserts, bear even higher costs. The famous Yaowarat (Chinatown) area is no longer bustling as before, reflecting the impact of fewer tourists visiting Thailand. Somsak stressed that the government must address this problem urgently. Relying solely on Chinese tourists is risky since they can travel elsewhere and China’s domestic economy remains weak. Thailand should diversify its target tourist base or focus more on domestic consumers, though local purchasing power is also limited. “Chinese high-end customers don’t just have money; they also choose carefully. Thailand’s reputation plays a big role in their decision,” he said. He painted a stark picture of the current business climate: restaurant activity has dropped about 60% compared to the same period last year, with many full-service brands closing. While this period is the low season, there’s little hope even for the upcoming high season. “Today, if you visit Yaowarat, you won’t see crowds spilling onto the streets anymore. No more Chinese tourists lining up for grilled shrimp or crab curry at 10 p.m., and the streets are quiet past midnight, unlike before,” Somsak said.