State of the Restaurant Industry Report, 2024

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

New restaurants openings slow down, while menus get inventive with viral food trends

June 5, 2024

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.

Business openings for dessert concepts increase, while higher-end restaurant openings decline

Change in new restaurant openings on Yelp, May 2023 – Apr 2024 vs. prior period

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 $$$ restaurants and up 29% for $$$$.

Diners encounter more self-service options in restaurants across the US

Change in restaurant review mentions on Yelp, May 2023 - Apr 2024 compared to May 2020 – April 2021

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%).

Review mentions related to tipping increase on Yelp as diners feel tipflation fatigue

Change in gratuity related review mentions on Yelp, May 2023 - Apr 2024 compared to May 2020 – April 2021

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.

Gratuity mentions rise at lower price point restaurants amid high inflation

Change in gratuity related review mentions on Yelp, May 2023 - Apr 2024 compared to May 2020 – April 2021

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%).

Mentions of tipping increased in nearly every U.S. state

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.

Croissant craze

In the last few years, the croissant has been reimagined in countless new ways, from the Croffle in 2022, the Suprême in 2023, to the recently viral Crookie in April. The beloved French pastry is continuing to see new variations, whether it’s in the baking technique or its filling. Searches on Yelp for the "flat croissant" are up 5,411%. Originating in Seoul, this version transforms the classic croissant into a buttery, thin treat, with spots like Alexander’s Patisserie leading the charge stateside. Meanwhile the "pizza croissant" (up 372%) is all about keeping the croissant’s iconic layers while introducing pizza toppings for a savory fusion.

Clubstaurants and photo bans

Search Increases

In 2022, Yelp forecasted the experiential dining trend and this year, we’re continuing to see the trend hold strong as diners seek out concepts that transform eating out into an all-out event. Restaurants, like Tao in New York and The Nice Guy in Los Angeles, provide patrons with a meal and a late night party destination, with searches for "clubstaurant,” up by 254%.

In a world where phones eat first, Yelpers are growing more curious about exclusive and private experiences that you can’t see just anywhere, with a surge in searches for “no photos” and “no photography" up 66% and 45% respectively. Reflecting this increase in interest, restaurants with a photo ban like Delilah in Miami, Frog Club in New York, and Powder Room in Austin have seen a rise in page views. Whether this trend sustains past the early intrigue remains to be seen.

Sweet indulgences

Consumers are increasingly indulging their sweet tooth with confections. On Yelp, searches for "Tanghulu" are up 7,818% as users look for shops where they can try the traditional Chinese snack of skewered fruits coated in a crunchy candy glaze. Similarly, in response to the viral social media trend of Swedish candy taste test videos, searches for "Swedish candy" (up 13,665%) are leading people to popular local spots such as BonBon Swedish Candy in New York.

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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Business Openings

Business openings refer to the new businesses listings on Yelp in a given timeframe. The business listings are added by either business representatives or Yelp users. Yelp analyzed new business openings in the restaurant category from May 2023 - April 2024 to May 2022 - April 2023.

Review mentions

We analyzed review text from May 2023 - April 2024 compared to May 2020 - April 2021 and May 2022 - April 2023 to observe how Yelp consumers are referencing self-service technology and gratuity in reviews of restaurant businesses. The volume of review text phrases are normalized by the number of times per every million words the phrases appeared in reviews, and is calculated for each Yelp category and on a national and state basis.

Search trends

To gather our report forecast topics, we identified trends within searches by measuring the frequency of the phrases mentioned per million searches. Trend statistics are noted as year-over-year comparisons from April 2023 compared to April 2024.

Downloadable static graphics can be found here.