In the hospitality business, 2015 will be marked as the year that restaurateur Danny Meyer announced that he was eliminating tipping. Galvanizing an industry that’s seeing the cost of business skyrocket, in part due to minimum wage increases, Meyer’s move is substantial. It will allow him to raise prices and get a tighter grip on compensation structure, which should in turn help him attract the best service talent. (Someday, perhaps, it will also drive better pay for kitchen staff.) While he was not the first to go no-tips, when someone with his reach and reputation moves the industry follows.
Since consumers will now have a choice between restaurants that use a Service Included model and ones that use the traditional tipping system, it’s worth understanding where we the people stand. How do we really feel about tipping? Is it the right system, time tested and socialized? Or is it, indeed, a relic due for an update, just like the POS system and reservations software?
Resy polled 2,000 diners from around the country. Here’s what we found:
The results show that while diners are just fine with the tipping system (68% said it rewards good service), they’re also open to change (57% are in favor of eliminating tips). But, with change, they’re expecting a service upgrade (81% of respondents felt Service Included service should be as good or better than before). Interestingly, for more than 3 of 10 people, Service Included pricing would be a factor when making choices. Overall, 59% of people chose a Service Included restaurant over a comparable one that uses tipping.
