Yelp data reveals rise in self-service in fine dining restaurants and nationwide increase in tipping fatigue

For more on the methodology for this report, click here.

The restaurant industry has shown remarkable perseverance despite the pressures of persistent staffing shortages, increased labor and supply costs, and changing consumer expectations. As restaurants across the nation respond to these new realities, they are finding ways to drive efficiency in front of house operations and adapt to self-service demands, while still delighting diners with new menu offerings.

Yelp data reveals that new restaurant growth has slowed year over year, with a notable decline in higher-end categories like New American, while pop-up shops and dessert concepts saw a surge in new openings. Additionally, Yelp analyzed reviews on restaurant business pages to understand how the industry has evolved through technology, as well as to track the growing conversation among diners about tipping in this new self-service dining age. Yelp searches also highlight trending food and drink items that are making their way from social feeds to restaurant menus.

New restaurant growth has slowed, while higher-end dining concepts saw a decline in business openings

Yelp data reveals that the restaurant industry continues to see growth with openings up 6% May 2023 - April 2024 compared to May 2022 - April 2023. However, the steady growth has decelerated by 4% from the growth reported last year. Pop-up shops (up 155%) continued to see the most significant growth as restaurateurs debuted new temporary concepts with limited menus to test diners’ interest. Sweet shops also experienced notable growth across several categories, such as dessert shops (up 52%), shaved ice (up 44%), pancakes (up 38%), waffles (up 32%), creperies (up 29%), ice cream and frozen yogurt (up 22%), and donuts (up 17%). Meanwhile, restaurant categories that are typically higher end ($$-$$$$), such as New American (down 46%), Teppanyaki (down 40%), and Modern European (down 36%), have declined as consumers grapple with rising prices even as inflation cools.

*Read about the methodology here

Restaurant owners implement self-service technology to address rising labor costs

Many business owners are responding to labor shortages and rising costs with restaurant tech upgrades that improve operational efficiency and streamline the diner experience. To track how this national conversation has developed since the pandemic, Yelp analyzed review mentions on restaurant business pages from May 2023 - April 2024 compared to May 2020 - April 2021.

Nationally, diners have taken notice of the rise in self-service options, with spikes in review mentions of "iPad checkout" (up 291%), "ordering kiosk" (up 238%), and “self checkout” (up 235%). They also encountered other cost cutting solutions that replace table service, such as “counter service” (up 203%). At higher-end restaurants typically known to provide fine dining experiences, Yelp data shows significant increases in mentions of “self service” up 159% for $$$ restaurants and up 29% for $$$$.

*Read about the methodology here

These cost cutting measures are not unique to dining experiences; automotive services, as well as shopping and retail businesses, have also seen a rise in review mentions of "ordering kiosk", as many businesses across these industries implemented self-service technology in stores.

Diners nationwide express tipping fatigue, with nearly every U.S. state seeing increased review mentions related to gratuity

Ordering kiosks often provide the opportunity to add gratuity as part of the checkout process, leaving diners feeling fatigued by how frequently they’re asked to add a tip to their bill. This is especially evident when consumers are met with the tip screen for businesses beyond restaurants. As digital interfaces replace traditional human service roles, there’s a growing debate among consumers about the necessity of tipping. The heightened focus on gratuity is reflected on Yelp with increases in restaurant review mentions of “tip screen” (up 811%), "gratuity" (up 111%), and "tipping" (up 81%). Consumers are more frequently mentioning tips as part of their overall experience, whether it's informing diners their bill already included tip or noting where they did not tip, with elevated references of “tip was included” (up 91%), "no tip" (up 71%), and “didn’t tip” (up 63%).

*Read about the methodology here

“Tipflation,” a phrase that arose when inflation began significantly increasing in 2022, has even made its way into Yelp reviews with mentions up 399%, comparing May 2023 - April 2024 to May 2022 - April 2023.

As diners encounter more tip screens or automatic gratuity, references to “gratuity” are rising more rapidly at lower price point establishments ($ and $$) compared to higher-end restaurants ($$$ and $$$$). This rise may be driven by consumers, who, due to high inflation, are more conscious of their spending and opting for more affordable dining options, yet still feeling the impact of the added tip. Yelp data shows review mentions of “gratuity” increased by 140% for $ restaurants and 103% for $$ restaurants. While consumers are still increasingly referencing gratuity at $$$ (up 58%) and $$$$ (up 26%) establishments, they may be more likely to expect to tip as part of their fine-dining experience.

*Read about the methodology here

In addition to these nationwide tipping sentiments, Yelp data reveals that nearly every state saw a boost in gratuity related mentions as diners experience tip fatigue across the country. The states with some of the largest increases include South Dakota (up 34%), Alaska (up 31%), Delaware (up 26%), New Mexico (up 25%), Hawaii (up 24%), Washington, DC (23%), and Georgia (20%).

*Read about the methodology here

From restaurant menus to social feeds, new food trends are emerging this summer

Despite changes in service and tip culture, consumers are still eager to dine out and try the newest food and drink trends. Yelp analyzed search data comparing April 2023 to April 2024 to track buzzworthy trends that are heading to dining tables across the country this summer.

As the restaurant industry adapts to new realities, it’s clear that resilience and innovation are driving its evolution. The shift towards self-service technologies and the ongoing debate around tipping culture highlight the industry's response to staffing shortages and rising costs. Despite these changes, diners remain eager to explore new culinary trends and unique dining experiences. In 2024, we will continue to monitor these developments and the ways in which restaurants are redefining service to meet consumer expectations.

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