Gen Z leads spending shift as cost-of-living pressures reshape Australian hospitality habits

A generational divide in spending is reshaping Australia’s hospitality landscape, with Gen Z willing to pay 40% more for drinks than Baby Boomers, according to the newly released Eat, Pay, Love Hospitality Report 2025 by Tyro Payments.

Gen Z consumers are willing to pay premium prices – $6.90 for takeaway coffee and $11 for beer compared to Baby Boomers who cap spending at $5 and $7.80 respectively. Millennials and Gen X fall somewhere in between. All generations are feeling the pinch with nearly half (49%) of Aussies adjusting their drinking habits due to rising costs, with one in ten cutting out alcohol altogether.

Tyro’s Eat Pay Love Report reveals insights from over 30 million food and drink orders and a survey of more than 1,500 Australian consumers and small business owners, which highlight changing social spending habits, tipping behaviour, business decisions around surcharges, and pricing predictions. Despite the challenges, small businesses remain optimistic, with 75% confident about their success in the next year.

What we learnt:

The great Australian generational split: Australia’s most realistic spenders are Gen Z

• Gen Z comfortable with paying more premium prices.
• Millennials more likely to order individually, using a QR code, than shout a round.
• Coffee price expectations vary by $1.90 between generations, with Gen Z accepting $6.90 while Baby Boomers limit spending to $5.
• Gen Z willing to pay $11 for beer compared to Baby Boomers who cap spending at $7.80 – a 40% difference in price tolerance.
• The most millennials would pay is $5.70 for a coffee and $9 for a beer.
• The most Gen X would pay is $5.10 for a coffee and $8.50 for a beer.
• The most Baby Boomers would pay for a coffee is $5 and $7.80 for a beer.

Gen Z and Baby Boomers are united on holiday surcharges

• Of Aussies surveyed, Gen Z and Baby Boomers account for more than 50% of those happy to pay a holiday surcharge if it meant keeping businesses open.
• Only 19% of home-loan laden millennials said they would.

The most ordered alcoholic drinks and food items of the past 5 years

In 30 million orders, over the past 5 years, Australians have ordered espresso martinis and chicken schnitzels the most compared to any other food or drink.

Other key highlights from Eat Pay Love

• 49% of Aussies have adjusted their drinking habits, due to cost of living.
• 35% of Aussies said they are less likely to buy a round of drinks for friends now vs a year ago.
• 67% of Aussies never tip. Of those who do tip, 14% are tipping less.
• 39% of businesses would close on public holidays if holiday surcharging was banned.
• 75% of small business owners are confident that their business will be successful in the next year.
• Nearly 80% of hospitality operators expect the price of a coffee to rise to between $6 and $7, and 74% expect a local schooner of beer to rise to over $10 by the end of 2025.

Check out the full Eat Pay Love Report here.

About Tyro: In 2003, Tyro set out to make payments the easiest part of doing business. Today, we’re still into business big time, powering more than 73,000 merchants across Australia with in-store, online and on-the-go payment solutions. Working with more than 700 partners, we create seamless payment experiences for hospitality, retail, services and health providers, with integrated banking and lending solutions designed to help unlock the potential of every business. For more information, visit tyro.com.