AAt the height of the Covid-19 pandemic, many Americans vowed to offset the negative impact on service industry workers by giving better tips. But new data shows that Americans have not only failed to persevere – they are worse tippers now than they were before the Covid hit.
While 73% of Americans say they always tip at a sit-down restaurant, that’s down from 77% in 2019, according to a new demographically-weighted survey from CreditCards.com. And while 57% of Americans always tip food delivery people, that’s down from 63% in 2019. Only about four in ten (43%) Americans always tip taxi or ridesharing services, up from one in two (49%) before Pandemic .
The one exception to this trend: Around two-thirds of Americans (66%) say they always tip their barber or barber, up three points from 2019.
“While more than a third of Americans have promised to become better tipsters in 2020 and 2021, sentiment appears to have softened,” said Ted Rossman, Senior Industry Analyst at CreditCards.com. “Inflation is affecting consumer spending power and a tight labor market has left many service industry companies understaffed and struggling to deliver superior customer experiences.”
Fast-food chains have weathered the pandemic better than dine-in restaurants, thanks largely to drive-thru service and digital ordering. Two prime examples are McDonald’s, the world’s largest fast-food chain, and Starbucks, the only two restaurant companies in the top 500 of the Forbes Global 2000 in 2022. The industry’s biggest climber, however, was Darden Restaurants, whose stable of restaurants with Full service options include Olive Garden, LongHorn Steakhouse and half a dozen others.
Decades of inflation has replaced Covid as the service industry’s biggest threat. Historically, restaurants have suffered during periods of high inflation as consumers look for ways to curb their discretionary spending. More than half (53%) of Americans now plan to eat out less “most of the time,” according to a new poll from CNBC. Recent data from Revenue Management Solutions shows that the average restaurant bill was 7.2% higher year over year, but restaurant traffic was down 9.4% in April over the same period.
The CreditCards.com survey also revealed confusion about tipping other types of service workers. For example, only 27% of Americans say they always tip hotel maids, while 26% never do. The remainder – almost half of those surveyed – said they tip householders only occasionally.
Younger American adults tend to be the biggest tipsters, but they’re also the most contradictory. While the average tip for a waitress at a seated meal is 20% for all generations, the average tips for Gen Zers (26%) and Millennials (24%) are much higher. Gen Xers tip an average of 20% and Boomers tip an average of 19%. Still, it’s worth noting that over four in ten (43%) of Gen Z and millennial restaurant-goers combined don’t leave anything, at least some of the time.
CreditCards.com’s survey shows that the power of suggestions allows restaurants and other establishments to inspire better tips. Among Americans who have learned of recommended tips, more than a quarter (26%) say they are inspired to tip more.