‘Tougher than COVID’: Thai businesses review 2024 and eye 2025

As 2024 draws to a close, Thai businesses are grappling with more challenges than opportunities, blocking prospects of sustained growth. 

Domestic pressures include a sluggish economy, fragile purchasing power, and high household debt.

Meanwhile, external factors are heating up, with a brewing trade war causing chain-reaction effects. 
Geopolitical conflicts also are spreading, acting as a ticking time bomb for the global economy.

Thai business leaders, CEOs, and top organisations have shared perspectives on the business outlook for 2025, as well as offering their reviews of the past year.

Real estate was among the Thai sectors hardest hit in 2024, as underlying factors dragged the property market down.

With household debt exceeding 90% of GDP, homebuyers found it increasingly difficult to secure loans as bank rejections soared. Prasert Taedullayasatit, president of the Thai Condominium Association, described 2024 as the most challenging year for the real estate sector. "It’s even tougher than COVID-19. Not the worst, but the hardest to fix – more so than the 1997 Tom Yum Kung crisis," he said. 

“If I had to define it, 2024 has been the toughest and hardest-to-fix year – a significant challenge for real estate developers of all sizes, from large corporations to small businesses, since the problem lies with consumers and financial institutions unwilling to grant loans,” he said.
 
Property in 2024: Tougher than COVID

Pornnarit Chuanchaisit, president of the Thai Real Estate Association, noted that the pandemic had a limited impact on the real estate market, particularly detached houses, which sold well as people moved out of condominiums.

“In 2023, real estate sales started to decline, with the top 10 largest companies still performing well, but regional sales dropping. This year, the situation has deteriorated further, with non-performing loans at banks hitting 6%, making loans even harder to secure,” he said.

However, foreign demand for property – particularly from Chinese buyers – remains strong. Yet, Thai laws impose significant restrictions on foreign buyers, which has led to a rise in purchases made through nominees.
 
Beauty blemished by high costs, fierce competition

Danai Derojanawong, chairman of Better Way (Thailand), marketer of the popular cosmetics brand Mistine, described the beauty business in 2024 as a "backs-to-the-wall" battle for all brands, driven fierce competition in the Thai market amid an ongoing price war.

“This year, the Thai market has stagnated, in contrast to expansion in international markets, where Mistine achieved double-digit growth. In China, we generated 16 billion baht after eight years in the market, but in Thailand, sales barely reached 4 billion baht. Despite Thai consumers’ passion for beauty, every brand is struggling due to price competition. Simply maintaining flat growth in Thailand is now considered a success.”

Rawit Hanutsaha, managing director of cosmetics and skincare brand Srichand Saha Osot, noted the beauty market in Thailand is valued at 340 billion baht and had been growing at 7-8% annually, marking a return to normalcy after COVID.

However, he defined 2024 as a "tough year”, pinpointing soaring production costs as the biggest challenge in business management. He added that low levels of disposable income also affected consumer behaviour.

“Whether the economy is good or bad, people don’t stop seeking beauty. Beauty products are daily essentials. When the economy is down, why do sales increase? People feel bored but avoid big purchases, leading to the 'lipstick effect' – where small, affordable items meet their needs. This year, with weak purchasing power, consumers are focusing more on value for money when making purchases,” Ravis said.
 
Retail/wholesale: Economy has flatlined

Milin Veerarattanaroj, managing director of Tang Ngee Soon Superstore, a major retailer in Udon Thani, described Thailand's economy in 2024 as "barely breathing" and akin to a chronically ill patient. His assessment reflects overall sales in the Northeast, which have fallen to levels last seen during the early pandemic in 2019.

“This high season has delivered no significant uptick in spending. Most businesses are experiencing flat demand, forcing operators to maintain stability by reducing inventory to match sales and controlling branch expenses. Some have resorted to staff layoffs. It remains to be seen whether spending will recover as New Year approaches,” Milin said.

Government efforts to stimulate the economy, which include the first phase of 10,000-baht digital payments to vulnerable groups, have provided only short-term benefits. The digital wallet scheme been likened to a gentle breeze rather than the economic whirlwind that the government was seeking.

Nattakit Tangpoonsinthana, chief marketing officer at shopping mall giant Central Pattana, said spending trends among mid and high-income consumers were still strong, particularly on weekends and holidays. However, lower-income groups still face economic challenges, impacting their spending power.

Tourists are a bright spot, however.

“Foreign tourists are now spending more at shopping centres in popular destinations than before the COVID-19 era. Visitors from China, India, Hong Kong, Taiwan, and Scandinavia show strong spending power – about 2.5 times more than Thai consumers. This is benefiting Central shopping centres located in popular tourist areas,” Nattakit said.
 
Tourism ‘smooth’ but foreign revenue falls short

Thianprasit Chaiyapatranun, president of the Thai Hotels Association (THA), remarked that 2024 has been a “smooth” year for Thai tourism, with international arrivals hitting 35 million – only slightly below the government’s target of 36.7 million. 

Yet while tourist numbers align closely with goals, Thianprasit noted that revenue remains "way off target". Foreign tourists generated 1.5 trillion baht between January and November, with the year's total expected to fall short of the Tourism Authority of Thailand's (TAT) 1.92 trillion goal. The shortfall stems from reduced tourist spending, shorter stays, and competition from neighbouring destinations.

Global economic factors, particularly under incoming US President Donald Trump, are expected to bring more challenges for Thailand’s tourism industry in 2025. New US foreign and trade policies, including higher import tariffs, may also take a toll on the Thai economy. 
 
Restaurants: ‘Olympic battleground’ 

Chataya Supanpong, chief engagement officer at Food Passion, operator of Bar B Q Plaza, likened the restaurant industry in 2024 to an Olympic-level competition, marked by an influx of global brands vying for market share in Thailand.

“This year, the restaurant business is akin to competing in the Olympics, as significant macroeconomic changes unfold,” he said, adding that diners may be the real winners.

“Next year will witness both veteran and new players introducing innovative, delicious offerings to meet consumer demands.”