The Boathouse restaurant group is ending service fees
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Aïda Amer/Axios
The Boathouse restaurant group is ending its 20% automatic service fees on all guest checks effective immediately.
Why it matters: Customers overwhelmingly hate restaurant fees, even as they've proliferated in the post-pandemic dining landscape.
- A Pew survey out last fall found 72% of respondents oppose the fees, including 50% who strongly oppose them.
- Karri's inbox indicates the number might be closer to 90% strongly opposed.
What's happening: The Boathouse group, whose seven local restaurants also include Casa del Barco and Island Shrimp Company, cited the Pew study and guest feedback in its decision to end the practice.
- "We've gotten consistent feedback from guests and staff that they miss the direct connection that individual tips allow," owner Kevin Healy said in a statement.
- To celebrate ending the fees, The Boathouse group is offering 20% off its entire menu at all its restaurants on Feb. 20. (Reservations are recommended.)
State of play: The Boathouse group was among the first in Richmond to begin instituting a flat 20% pre-tax service charge on all checks as a way to offset raising hourly wages for staff amid the industry uncertainty during the pandemic.
- The fee allowed the restaurant to raise hourly wages for servers from $2.13 an hour to around $20, the Times-Dispatch reported last year.
Be smart: Unlike automatic gratuity — a fee restaurants have long added for large parties and distributed directly to servers — service charges usually go to the restaurant owner to distribute however they like.
- Some independent restaurant owners started using them during the pandemic on all checks to cover increased staff costs as restaurant workers demanded better pay and benefits.
- Such fees now show up at 16% of all restaurants, up from 15% last year, according to the National Restaurant Association's State of the Industry Report.
Worth noting: Service charges didn't start with the pandemic. Restaurant owners across the country have been experimenting with them for more than a decade as a way to eliminate America's perennial problematic and persistent dining practice: tipping.
- Eliminating tipping, and creating a more equitable pay scale for kitchen and front of the house staff, is why Richmond's largest restaurant group, Lindsey Food Group, implemented a 20% service charge at its restaurants.
Yes, but: The Pew survey suggests service fees have only created more confusion around tipping, in addition to irritating the dining public.
- Consumers have cited confusion over what they cover (varies), who gets the money (up to the owner) and — crucially for them — whether they're actually supposed to tip on top of the fee (you don't "have" to, but...).