Cornell Hospitality Quarterly

Studies of tipping behavior indicate that black customers tend to leave lower tips than do white customers. Rather than unnecessarily demean a customer group, however, the industry should try to understand and address the underlying cause of this ethnic difference in tipping. The results of the study reported here suggest that differences in tipping between African American and Caucasian customers may reflect differences in the groups’ familiarity with the 15 to 20 percent restaurant-tipping norm. This explanation suggests that one solution to the problems posed by differences in the groups’ tipping is to publicize the 15 to 20 percent tipping norm in minority communities.

Restaurant servers have the impression that black Americans do not tip as well as white Americans do—a perception that causes negative attitudes and actions on the servers’ part. A convenience survey of ninety-nine servers in twenty restaurants (in Maryland and Florida) lends credence to that general impression. Using 15 percent as the benchmark for a “good” tip, three-quarters of the servers stated that their black customers routinely tipped below 15 percent, while only one server said that white customers usually tipped less than 15 percent. In general, the servers’ race did not affect their responses about tip levels. In a second survey, two servers in Florida recorded their tips for a total of 151 parties over a two-week period. According to their records, nearly half of the entirely black parties tipped below15 percent, and the mean tip for all black parties was 14.29 percent. For parties composed entirely of whites, one-fifth tipped less than 15 percent, while the mean tip for all white parties was 17.27 percent.

Recent studies suggest that black American diners tend to tip less than white American diners. Rather than address tipping directly, this study uses in-depth interviews of white restaurant workers to frame the issue of how restaurant workers view and respond to customers of color. The present research indicates that white American restaurant workers actively participate in derogatory stereotyping of black American customers, engaging in the use of racial code words and derogatory ethnic labels, while discriminating—both overtly and covertly—in their service interactions with black customers. Among other things, servers attempt to negotiate with other white employees to avoid having black parties seated in their sections and actively try to trade off such “undesirable” parties. Servers’ logic regarding tipping is self-perpetuating in the sense that they avoid serving parties of black customers because they anticipate poor tips. These results suggest that evidence of racial tipping differences needs to be viewed cautiously in the service context in which they exist and that the industry should take special care to ensure that when servers serve black Americans, they should provide service that justifies a good tip.

The issue of cultural tipping differences extends far beyond the practices of a single ethnic group. Rather than focus solely on African Americans, for instance, the restaurant industry should seek ways to educate many cultural groups in prevalent tipping practices. In the main, tips that are regarded as poor are mostly the result of ignorance and not spite. The consequences of poor tips are negative for the industry, for its employees, and for its customers. Therefore, cultural and industry groups should work together to educate customers from all backgrounds about tipping mores.

Revenue-management tools can be used by restaurant managers to analyze the effects of process-control changes. A dinner house seeking to shift demand and to achieve greater facility utilization during busy times analyzed the factors that caused delays in the service process—and thus increased the guest queue. Although the restaurant was able to hasten the actual dining time, much of the slack was found in the processes that occurred before and after the actual dining period. Moreover, the restaurant managers were able to analyze customer-arrival and market-mix data in relation to the restaurant’s table mix. Seat occupancy was improved by matching the table arrangement to the customer mix, and table turns were increased by improving the kitchen operations so that front-of-the-house functions could be tightened up. In particular, end-of-meal steps were speeded up. As a result of its process improvements, the restaurant enjoyed revenue growth greater than that of comparable restaurants.

Asked for their reactions to specific demand-shifting tactics based on revenue management, patrons of a restaurant in Ithaca, New York, indicated that they generally would be willing to shift their dining time to off-peak hours in exchange for discounts on menu items. Better than three-quarters of the 367 respondents agreed that they would accept an incentive for dining at an off-peak time. Specific results and conclusions are detailed below.

Despite hotel revenue managers’ increasing reliance on computers, human judgment is still indispensable. A study of fifty-seven experienced revenue managers found that the nature of the user interface influenced the way the revenue managers adjusted the computers’ forecasts—even though the managers were all given the same predictions regardless of the interface. The managers were divided into four groups of four possible interface designs they experienced. Those with a deliberate computer and no chart made the smallest volume of adjustments to the computer’s forecast, about half that of the managers using a speedy computer and a chart. That group was followed by those with a speedy computer and no chart. The managers with a slow computer and an interactive chart made the highest volume of adjustments. Further research should indicate the exact nature of the interface’s influence on human judgment.