Go local or go bust
The sudden death of international tourism threatens to change the face of the entire restaurant industry
Bangkok is about to enter another month of emergency decree, as the Government announced a further extension throughout June. During this time, a smattering of restaurants have awakened from a forced slumber but many others simply refuse to open under futile circumstances. At present it remains required that restaurants must practise social distancing seating at a minimum of one metre apart with partitions appropriately placed between diners and that no alcohol is to be served for dine-in guests.
Besides these COVID-19 imposed regulations that are crippling the dining industry, the restrictions on travel into Thailand in the short and long term could see hundreds if not thousands of businesses go bust or shutter permanently.
Jens Thraenhart, Executive Director, Mekong Tourism Coordinating Office & Founder of Chameleon Strategies. Vice Chair, UNWTO Affiliate Members whose business is to understand the nuances and movement of travel and tourism, stated, "I believe that, due to government policies and consumer confidence, the recovery of travel will first start locally, close to home, then expand domestically, then regionally, and then internationally, with mid-haul before long-haul."
Those directly hit in the tourism sector have been travel and tour agencies. Herman Hoven, CEO of Khiri Travel, a ground handler agency for overseas tour operators that creates bespoke tailor-made itineraries, noticed anomalies in the COVID-19 crisis travel trend, observing that, "When the numbers in Asia were going down, the numbers in our main source markets of Europe and the US were still going up, so we realised that domestic and regional markets would be the first ones to flourish again."
This basically meant that local restaurants that previously relied on Thailand's powerful magnetism for the tourist dollar had awoken to an old "new normal" world where short-term foreign visitors have become a novelty.
Chef Andy Yang of Table 38 Restaurant, an innovative Michelin Star-rated Chef's Table restaurant which uses sound speed and steel precision in Thai food is typically accustomed to a 90% international, 10% local dining ratio. He commented that, "Basically, we've seen 90 percent income loss. Or to put it in easy words: we are not getting enough income. Ten percent local business doesn't even cover our payroll. We have been forced to shut our door to patrons. Instead, we turned half of Table 38 into a full-time research and development lab and the other half into a restaurant delivery module."
Meanwhile, K.Tanaporn Markawat (Can), owner of Crab and Claw, Kinkao, Carne and the aptly named "The Local by Oam Thong Thai Cuisine", a Bangkok institution which focuses its client base on Thai locals and whose clientele ratio is opposite to Table 38's, had something similarly sobering to say on the topic, commenting that, "Largely due to government border policies and international awareness around travelling, businesses that mainly target foreign customers will experience more difficulties in comparison to the ones targeting locals. But that doesn't mean that local restaurants have entirely escaped the evil clutches of COVID-19. He continued, "Just like any service industry business, restaurants are greatly affected by COVID-19: ours is no exception."
Moreover, what can't come in must remain out. Many restaurants not only rely on foreign visitors but foreign produce to substantiate their international menus. Chandini Gulrajani, managing director of Bangkok's first Ministry of Crab Bangkok, the uber famous seafood restaurant chain dotted throughout the globe, can no longer rely on procuring the enormous species of Sri-Lankan crab which made the brand so famous. So she was forced to come up with a solution by looking toward domestic resources.
"With the uncertainty of the market and the COVID-19 flight and cargo restrictions, we have had to shift our focus from importing our crabs to supporting our local suppliers and Thai Fishermen," she explained.
This does not mean ‘going-local' is an easy band-aid fix, Can advises.
"Any businesses that try to switch type and target new segments of the market need to be sure to study and understand the market and make the right decisions rather than just quick decisions. COVID-19 may be with us for the long run, so it might be worth taking a step back to think hard and find your uniqueness."
A fine restaurant that has tapped into that ‘uniqueness', with 95% of diners local, is Karmakamet Conveyance, a new but quickly recognised restaurant that was forced to close only months after opening due to COVID-19 but is set to reopen on 1 July 2020.
Jutamas Theantae, owner and head chef of Karmakamet Conveyance, reflects, "I think what we did was very different, our cuisine was more conceptual and mysterious to Thai people. We appealed to their curiosity and after people tried, most enjoyed it. It was a risky decision that worked out because we were available to those looking for alternative experiences not part of a particular scene or pushing a thought process."
With its new sustainable-friendly approach, Ministry of Crab Bangkok set out to appeal to the Thai taste but in more conventional ways by creating an original "Tom Yum Crab" dish which quickly generated interest.
Looking down the barrel of bankruptcy, has inspired businesses to maximise their will to find a way. Sometimes that will equates to pure, unadulterated passion.
Chef Andy poignantly remarks that, "Table 38 doesn't just aim to make money. We are more motivated by seeing how far we can push ourselves to break through barriers of flavour, texture and temperature. But of course, like other restaurants, we do adapt wherever necessary to survive. We change up every day and sometimes twice in a day just to keep up with what's going on."
He continues, "Most chefs and restaurants are used to working under duress and stress for long hours with poor pay and crazy margins. We adapt, we survive, we evolve. So whoever comes out on the other side of all this will be all the stronger for it."
The travel sector, with its longstanding symbiotic relationship with the gastronomy scene, has also learned to adapt and switch to survival mode.
Says Herman, "Different markets require different approaches and different products. Our teams have proven that they can relatively easily adapt and re-invent themselves even as we speak. Current circumstances require flexibility and unconventional ideas. Now we even see Michelin star restaurants start delivery services! Who would have ever thought? Perhaps the whole travel industry should follow suit and widen its horizons too."
Despite all the trials, Jens has hopes for a greener and brighter future for travel amid and post-COVID-19.
"This is an opportunity for us to reset tourism and address sustainability and climate change at the same time. First we need to fix destination management and manage overcrowding. We have to recognise that regional Tourism is more important than ever now that COVID-19 has really brought it to the forefront."
So for how long will these lifestyle enhancing, employment creating, tax paying and endlessly entertaining industries have to brace themselves before welcoming back the country's most beloved and essential international tourists, and how much harder can it get?
Herman's parting words for all the concerned business owners out there are, "It's too hard to tell but I'm optimistic that it will be Q1 2021 at the latest that we will see a real increase in flights and international movement. Remember, these service industries are resilient – mankind has a natural itch to travel and explore."
And driven by passion and creativity, it seems the players in them will never say die.
Samantha Proyrungtong, an Australian born with Thai heritage, is a well-known ‘foodies' entrepreneur based in Bangkok who runs her own specialty food business (VIVIN Grocery, Ekamai Complex, Tel. 080 463 5747) and marketing consulting company (Extrovert Marketing Consulting) and is founder of BangkokFoodies.com and FoodiesOfficialAsia.com.
- Chameleon Strategies: www.chameleonstrategies.com
- Khiri Travel: www.khiri.com
- Table 38: www.table38bkk.com
- The Local by Oam Thong Thai Cuisine: www.thelocalthaicuisine.com
- Ministry of Crab Bangkok: www.ministryofcrab.com/bangkok
- Karmakamet Conveyance: www.karmakametconveyance.com
- Mekong Tourism: www.MekongTourism.org