Millennials make up nearly a third of restaurants' revenue
Millennials now make up nearly a third (29%) of restaurants' annual revenue, according to new research.
The majority of millennials (60%) either live with their parents or are part of a couple with no children, meaning they have considerable spending power, a report on behalf of law firm CMS claimed.
The report, entitled Finding the balance: human touch vs high tech, estimated that millennials spend 13% of their total income on eating out.
It also found that they eat out an average of four times a month, which is more frequent than the rate at which they are ordering food in.
The research, conducted by FTI Consulting on May 2018 on behalf of CMS with owners, operators, investors and managers of hotels and restaurants in ten countries, also revealed that 25% of millennials will pay more at a restaurant if its social media ratings are excellent, while 72% value interaction with restaurant staff.
Some 90% of respondents believing that their businesses are underestimating millennials' expectations of the hospitality sector and 83% are now attempting to futureproof their businesses.
In restaurants, the technological improvement most wanted by millennial respondents is the ability to order food and drinks before arriving (47%), paying via an app (44%) and ordering food electronically at the venue (34%).
In response to those demands, 52% of restaurateurs have implemented technology to allow food and drink ordering in advance of arrival and 39% to let customers pay their bill online or through an app, the survey found.
Some 28% of restauranteurs intend to implement an interactive e-menu that shows food selections in 3D and nearly a quarter (23%) expect to introduce the option of dining with a virtual companion via an interactive screen, according to the research.
Thomas Page, head of hotels & leisure at CMS, said: "The significant spending power of millennials is having a big impact on the sector.
"Millennials already account for 29% of revenues for restaurants, according to our research. But in responding to the most tech-savvy generation yet to reach adulthood, restaurants need to be wary of stereotypes. There is no typical millennial and for many the human touch still trumps high tech when they're considering where to eat.
"With such a large percentage of their income now coming from the millennial generation, restaurant groups and restaurateurs need to ensure they are futureproofing their businesses now to cope with their desires and demands. The tech savvy nature of the millennial group and their loyalty to a brand is of huge significance to the future of the industry and they must continue to adapt and to evolve to meet these new challenges."
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