Sponsored by Dinova
Today’s business traveler is faced with a landscape of dining choices far beyond that of the days when most meals on the road were in the hotel’s restaurant, or traveler’s room. Now, as midpriced hotels without full dining service multiply and even full-service hotels de-emphasize room service, an increasing array of restaurants are offering new services, to accommodate these business diners. Similarly, large corporations are searching for ways to manage business dining spend internally as travelers are presented with this new landscape.
As business dining continues to evolve, so should the marketing efforts of restaurants. That is why, for the second consecutive year, Dinova, Inc., and The BTN Group have partnered on a joint industry research study. Once again, the research finds that business dining is one of the more undermanaged areas of the corporate expense budget. Business dining spend historically has represented 10% of overall annual T&E spend, but 44% of respondents indicated it represented 11% or more this year. This increase in spend offers the opportunity for restaurants to generate incremental revenue by serving the business dining segment.
According to the survey, 49% of respondents reported that his or her company spent $1 million or more on business meals and entertainment expenses in 2016. This number increased 9% over last year’s survey results. Despite the economic downturn in consumer spending, business dining continues to deliver high-margin guests to restaurants around the country.
The business dining expense comes in a variety of ways, including out-of-town travelers, marketing and events, client entertainment, internal business catering and private dining. When asked to choose all restaurant types that are most frequented by business employees eating on expense accounts:
• 45% said fast-casual
• 26% said independent restaurants
• 18% said chain-dining establishments
• 15% said quick-service restaurants
When asked what percentage of meals and dining expenditures occur in employees’ home market(s) versus out-of-town business travel, 65% of respondents indicated that the majority of their business meal expenses are out-of-town. Conversely, less than 10% indicated that the majority of their business dining spend was in their home markets. 25% did not know.
As was the case in last year’s survey, almost every respondent indicated that their organization has a policy in place that addresses employee dining while traveling for business. Additionally, nearly four in five respondent organizations have policies that cover meal reimbursement for an employee's co-workers and supervisors, and about 70% and 60% respectively have policies concerning customer meals and entertainment. Travel policies at less than half of respondent organizations cover dining at meetings and onsite meal catering. These figures all were stable from the 2016 survey.
The methods by which organizations address dining, however, vary significantly. There's no consensus, for example, on whether to allow traveling employees a reimbursable per diem for meals, or to set price caps by city or meal. About 44% of respondents indicated that their organizations have instituted a policy that sets maximum daily rates for meal reimbursement, which was the most frequently noted policy among respondents. About 35%—respondents were allowed to select more than one answer—indicated their organizations will reimburse the amounts on travelers' dining receipts. Between 20% and 30% indicated their organizations have set per-meal or per-city spending caps, or have instituted guidelines or ranges for acceptable dining spending.
More than one-third of companies surveyed have taken steps to better manage dining (8 percentage points more than a year ago) and an additional 20% plan to act this year.
“Despite consumer traffic softening in the first quarter of 2017, business dining continues to increase year-over-year,” said Vic Macchio, Founder and CEO at Dinova. “We estimate business dining spend in the U.S. to be $60+ billion annually, and the revenue opportunity for restaurants who tap into this market is significant.”