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BUSINESS HOSPITALITY
Americans Are Tipping Less Than They
Have in Years
Frustration with rising menu prices and ubiquitous tip prompts lead to a
six-year low
By Heather Haddon Follow
Jan. 9, 2025 9:00 pm ET
Servers were doubly squeezed last year by falling tips and shrinking work hours. PHOTO: TOM
GRALISH/ASSOCIATED PRESS
People are tipping less at restaurants than they have in at least six years, driven by
fatigue over rising prices and growing prompts for tips at places where gratuities
haven’t historically been expected.
The average tip at full-service restaurants dropped to 19.3% for the three months that
ended Sept. 30 and hasn’t budged much since, according to Toast, which operates
restaurant payment systems. The decline highlights a bind restaurants find
themselves in, as they face rising costs of ingredients and labor amid customer
frustration over spiraling bills.
Tipping at U.S. sit-down restaurants in the past six years peaked at 19.9% in early
2021, when Americans were likely to express gratitude as Covid-19 lockdowns eased.
Median full-service hourly tips vs. base People have become increasingly
wages grumpy about dining out. Many have
$16 recoiled at menu prices that have risen
sharply in recent years, and are going
14
Tips
out less and ordering less when they do.
Some restaurants have added
12 mandatory gratuities and service fees
Base to bills, driving up bills and resulting in
10 some diners tipping less.
8 “Instead of that second or third drink,
people will go home,” said Andrea Hill,
6 director of operations for HMC
2022 '23 '24 Hospitality Group, a Chicago operator
Note: Data for tip-earning U.S. workers in a job for at of Hooters restaurants. “Our servers
least one year
are making less per table.”
Source: ADP
A Hooters location in downtown
Chicago sells a BBQ Bacon Cheddar burger for $12.49.
John Reilly, a doctor in Washington, D.C., considers himself a generous tipper. But he’s
hitting his limit as menu prices rise. “Restaurants have not been doing well here in
D.C., and price definitely has much do with it,” Reilly said.
About 38% of consumers reported tipping restaurant servers 20% or more in 2024,
according to a survey last fall of 1,000 consumers by restaurant technology company
Popmenu. That’s down from 56% of consumers in 2021, according to the company,
which said budgets are weighing more on diners’ minds.
Americans went to restaurants less in 2024 than they did in 2023. Restaurant chains
and operators last year declared the most bankruptcies in decades, with the exception
of 2020, when Covid-19 shutdowns decimated the industry, according to an analysis
of [Link] records. High-profile bankruptcies in 2024 included casual-
dining chains Red Lobster and TGI Fridays.
Around 70% of Washington, D.C. , restaurants have raised prices since voters struck down the tipped
wage system in 2022. PHOTO: OLIVIER DOULIERY/AGENCE FRANCE-PRESSE/GETTY IMAGES
Restaurant workers didn’t fare much better. Waiters, bartenders, cooks and other
restaurant workers averaged less time working per week last year than 2023,
according to federal data.
Restaurant servers know customers are annoyed about how often they’re now asked
for tips. Payment systems on digital tablets prompt them to add gratuities, even at
businesses like airport concessions and gas stations.
“I can see tipping culture in the U.S. cracking,” said Jenni Emmons, a server at an
upscale Chicago restaurant. “People are being pressured to tip for things they didn’t
used to, and I feel my income is under threat because of this.”
Some worker-advocacy groups maintain that servers, bartenders and other tip-
earning workers rely too much on gratuities. They have taken aim at the tipped-wage
system, in which many states permit restaurants and other businesses to pay tip-
earning workers less than the minimum wage—so long as income from tips makes up
the difference.
New York-based One Fair Wage is one of the groups arguing that the system forces
customers to subsidize restaurants that pay waitstaff low wages. Tip-earning
workers, they said, deserve the same minimum wage paid to other employees, plus
any gratuities customers might offer.
The campaign has secured recent victories in Chicago and Washington, D.C., where
minimum wages for workers who receive tips are on track to match the broader
minimum over the next few years. One
Average full-service tips
Fair Wage plans to push similar bills or
National D.C. Chicago ballot measures this year in New York,
20.5% Illinois, Ohio, Arizona and Maryland.
The restaurant industry is pushing
20.0 back, warning that the shift is already
cutting into restaurant traffic, hurting
operators and servers alike. Mike
19.5
Whatley, the National Restaurant
Association’s head of state affairs and
19.0 local advocacy, said the trade group and
its members are prepared to continue
18.5 battling efforts to eliminate the tipped
2019 '20 '21 '22 '23 '24 wage system.
Note: Data through Sept. 30
Source: Toast
In Washington, D.C., around 70% of
restaurants have raised prices since
voters struck down the tipped wage system through a ballot initiative in 2022,
according to a local trade group.
Price increases in D.C. have averaged
9%, according to a survey of 158
operators the group conducted last
fall. Many have imposed service fees
and gratuities to offset the wage
increase.
Fritz Brogan, who co-owns five bars
and restaurants in the city, said the
higher payroll costs have led him to
raise menu prices by around 10% and
trim employee hours. His Mission
Navy Yard now charges $15 for an
espresso martini, according to the
restaurant’s website, up from $13 in
2023, according to an archived
version of the site.
Fritz Brogan says higher payroll costs at his five D.C.
bars and restaurants have led him to raise prices.
PHOTO: TONY POWELL
He is considering adding service charges next July, when the minimum wage for
service staff rises to $12 an hour. That would add some $400,000 in costs across his
350 hourly staff, he estimated.
Brogan said the fees can leave diners confused and wondering whether they should
still tip. “The last thing people want is to be doing calculus at the end of the night,” he
said.
Mohit Ganguly, a Washington resident, said it’s easy to miss the mandatory fees that
most eateries in his area have tacked onto their menus. “Tipping 15% to 20% on top of
that feels superfluous,” Ganguly said.
Write to Heather Haddon at [Link]@[Link]
Appeared in the January 11, 2025, print edition as 'Americans Are Tipping Less Than They Have in
Years'.
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