Restaurant business operators anticipate a risk of closures in the second half of the year due to low consumer purchasing power and high costs.
Sorathep Rojpotjanaruch, head of the Restaurant Business Club, said the restaurant industry enjoyed rising momentum in the first quarter of the year due to the rebound of the tourism sector.
However, after the Songkran festival, the industry saw a significant decline in the number of customers as consumer spending dwindled.
"The high level of household debt has dampened consumer purchasing power as people are now more careful with their spending," Mr Sorathep said.
Even though Thailand welcomed 17.5 million foreign arrivals in the first half of this year, the industry might not fully benefit from this high figure, he said.
As a matter of fact, since the duration of stays among foreign visitors is quite short their spending might not be as high as the authorities anticipated.
"Moreover, we experienced a hike in raw material costs in May, which further exacerbated the challenge we already faced," Mr Sorathep said.
He said the industry will continue to face the challenge of high raw material costs and the weakening of consumer spending in the second half of this year.
"As costs rise, small restaurant operators might be forced to go out of business, while big restaurant chains will survive as they are resilient enough to survive a market slowdown," Mr Sorathep said.
He said the club would like to request the government consider offering stimulus measures specifically tailored to the restaurant industry, such as a tax rebate campaign for consumers and a reduction in the land and building tax.
For example, a scheme that would allows Thais to dine or purchase food and beverages at small to medium-sized restaurants and use the receipts as a deduction in personal income tax.
The club also proposes a cash handout scheme to buy food and raw materials solely for the cooking of food through the existing "Pao Tang" app, which is similar to the "Rao Chana" (We Win) financial aid scheme implemented during the pandemic.
Referring to the 10,000-baht digital handout scheme initiated by the ruling Pheu Thai party, Mr Sorathep said the eligibility criteria for vendors remain unclear.
Furthermore, following the receipt of digital money by the vendor, there is the question as to how long would it take to convert it into cash as most vendors rely on revolving money and need to convert the digital money into cash immediately.
As a result, some small vendors will turn to buying raw materials from big conglomerates or wholesalers rather than from small shops which will not increase the money in circulation as the government anticipated, he said.
"I expect just around half of the small and medium-sized restaurants will apply for the scheme, while small food vendors might not," Mr Sorathep said.