SevenRooms released its first trends report, "2024 Restaurant Trends and Diner Expectations," highlighting how restaurants are filling the need for 'third places,' connection spots outside the home and workplace, what consumers expect from their dining experiences, and how restaurants are leveraging AI and automation to keep diners coming back.
The study, commissioned through independent third-party research firm Censuswide, examines consumer and foodservice operator insights, alongside data from SevenRooms restaurant customers. It emphasizes the importance of restaurants understanding their guests and providing experiences and value to consumers, including marketing and tech trends that operators are paying attention to.
Diners Expect More from Restaurants
While it's no surprise that diner expectations have evolved in recent years, consumers across generations and cities share key expectations when dining out—they're looking for convenience, personalization and value from brands they trust. Restaurants must nail all aspects of the guest experience, from hospitality and service to ambiance and atmosphere, to transform diners into brand ambassadors and get them to bring their dollars back more often.
When looking across generations, Millennials are driving a dining resurgence—dining out most frequently with 38 percent saying they dine out more than five times a month. They are seeking more from their restaurant visits and are willing to spend more for elevated experiences, like theatrical elements or high-end items like caviar. For these experiences, Americans are willing to spend up to $63 per person, with 45 percent of Gen Zers open to paying even more. As diners focus on the quality over quantity of their experiences, that means restaurants must do more to keep those diner dollars. Dining upgrades consumers are willing to spend more fall into three categories: experiential, luxurious and personal, including:
- Experiential (e.g., tableside martini cart; fish presentation or deboning, etc.)
- Personal (e.g., birthday dessert; welcome drink)
- Luxurious (e.g., caviar, freshly shaved truffles, seafood tower)
Outside of these experiential offerings, restaurants must also capitalize on influential factors that bring diners back. For example, 34 percent of Gen Zers want personalized surprises in service like a free dessert. Meanwhile, 26 percent of Millennials care about the ease of making a reservation and 24 percent of Gen Xers consider the rapport they develop with front-of-house staff. Tailoring guest experience and service helps operators turn one-time diners into loyal customers.
"New consumer demands are pushing restaurants to find the right balance between hospitality and automation to create the experiences guests crave and return for," SevenRooms CEO and Co-Founder Joel Montaniel said in a statement. "Diners want both access and recognition when spending their hard-earned dollars, and restaurants must embrace new strategies—and technologies like AI and automation—to enhance hospitality at every touch point. Whether leveraging platform data to personalize diner experiences or power marketing and retention programs, technology and data serve as a vehicle to execute hospitality that guests remember and return for. When technology is used effectively, it allows operators to focus on building deeper connections and delighting guests, one experience at a time."
Loyalty is Never One-Size-Fits-All
In the U.S., there was a 21 percent year-over-year increase in reservations comparing Q1 2023 to Q1 2024 and restaurants are looking to a promising future. Whether operators are focused on opening new locations or revamping their social media marketing efforts, one factor remains the same—establishing personal relationships with diners is the strongest way to build and maintain loyal customers.
Consumers have a strong intent to dine with their favorite brands. If a guest can't get a reservation at their preferred restaurant, 39 percent of guests look for a sister restaurant to dine at, and 27 percent check other sites for the same restaurant.
Cultivating loyalty is critical. Loyalty is not a one-size-fits-all effort and diners have different interests when it comes to the benefits they seek out from loyalty programs. Restaurants need to understand their diner demographics to curate operations and offerings, getting their guests to not only return more often but spend more in the process.
Thirty-eight percent of diners who would spend $89-$126 on an average night are looking for exclusive VIP events, while 33 percent of consumers who dine out seven to eight times per month want VIP access to specialty seating areas. Breaking down generational differences:
- 72 percent of Gen Zers care most about free menu items
- 30 percent of Millennials care most about VIP access to specialty dining areas
- 1 in 5 Gen Xers and Baby Boomers want early access to reservations
Genuine, Tailored Marketing is Critical
When it comes to marketing, authenticity and personalization reign supreme for consumers. Guests want to be known by their favorite restaurants, and restaurants want to know and understand their guests. To reach these consumers, and serve up personalized marketing that makes guests want to return, restaurants have to use all the tools in their arsenal—from social media to email and text marketing automation—to create high-touch communications that are both authentic and personal.
79 percent of restaurant operators spend the majority of their marketing budget on social media. Their top social media goals are to drive bookings or online orders (39 percent), increase brand awareness (29 percent) and communicate with their audiences (29 percent). But not all content is created equal—39 percent of operators say that organic posts drive the most bookings to their restaurants. Restaurants that showcase their personality—highlighting their team, food and drinks and atmosphere—will win with consumers as they look for more genuine content from brands.
Most diners like hearing about restaurant promotions and offers via email and text, and aren't as interested in social media DMs or phone calls, but specific preferences vary by generation. 41 percent of Gen Zers prefer text marketing, whereas 38 percent of Millennials and 37 percent of Gen X prefer email marketing.
With targeted email marketing, the data report notes that operators see 23 percent higher open rates and 28 percent higher click-to-open rates, generating two times more revenue per email. Text marketing is fairly new for restaurants, but has huge potential, with an average open rate of 98 percent and $1.64 average reservation revenue generated per text message.
Artificial Intelligence Comes into Play
Every industry today is using AI and automation in some way to streamline their operations and help staff work more efficiently, and the same is true for the restaurant industry. Seventy percent of operators surveyed said they use artificial intelligence in some way to run their business, including:
- 35 percent - Processing reservations
- 34 percent - Inventory management
- 33 percent - Data analytics
- 27 percent - Scheduling
- 26 percent - Dynamic pricing
But there is room to grow with AI, with only 16 percent saying they use it to create marketing collateral and 15 percent for staff hiring and training. With personalized marketing a large focus for operators in 2024 and beyond, as well as hiring and retaining staff to deliver on high-touch hospitality, operators have an opportunity to use AI more effectively.
To download the full report, visit here.