In fact, according to the latest figures from the National Restaurant Association, dining in restaurants accounts for $683.4 billion in sales for 2014, as tallied through some 990,000 restaurant locations in the US. For those traveling and dining on a corporate card, the dining spend can be one of the largest line items on the expense report, just below air and hotel.
Dining spend accounts for some 16 percent of business travel expenditures, according to numbers from Advito, the consulting division of BCD Travel. Business travel spend management solutions and services provider Concur puts the number “north of $50 billion” in the data they are seeing.
And that number is only getting larger as dining receipts show consistent single digit growth rates year over year, according to the National Restaurant Association.
“A certain percentage of your total trip spend is related to tertiary travel categories, so you could argue that 26 percent of a trip is in-destination spending and 16 percent of that may be directed at meals. The time is right for managing that category more effectively,” says Miriam Moscovici, BCD Travel’s director of emerging technology. “We have an ever more sophisticated consumer and they are consuming this information live with better local intelligence than those who are managing their travel for them.”
Compliance in dining is usually reported as a transaction on the corporate travel card. And as long as a traveler stays within the spending guidelines, dining is considered tracked, says Victoria Graham, senior director of business travel solutions at Visa.
“If there is a corporation that wants to be notified or alerted for specific limits, there are notifications they can get to manage those travelers and keep them compliant. But we don’t granularly go into specific spending lines,” she says.
Delivering Spend on a Platter
One company, however, is looking to turn the tables on dining spend. Dinova launched in 2009 with a business model built around connecting the three players in the business dining category; restaurants who want the corporate checks, business travelers who want a certain measure of convenience and corporations that want cost savings and rebates.
“The spend was huge and no one was going after it,” says Dinova founder and CEO Vic Macchio. “Back in the 1990s we started thinking about other areas ready for better management and dining line items came up. This is a large component of the T&E – easily 10 percent – and still, no company on any kind of scale has done much with this. There are per diem policies and programs that vary city by city. But what has not been done is the establishment of preferred suppliers in the dining space – something that is de rigueur in cars and air and hotels, but not on the restaurant side,” says Macchio.
For Macchio, who came from a 17-year career in corporate travel and entertainment expense management with American Express, the answer was simple: create a preferred restaurant system.
Restaurants like business travelers because they tend to spend two to three times more than leisure customers. Corporations might like a restaurant program that rebates back a percentage of every meal check. Business travelers might enjoy a preferred dining program because the concept would act as a guide and curation system for restaurant choices, especially in locations and destinations that are not familiar to them.
As of last count, the tally at Dinova is more than 12,500 restaurant locations in the US and they’re not all Jamba Juice and pizza spots; they run the range of quality and price, with the likes of Spago on the list, alongside select sushi restaurants and farm-to-table gourmet choices.
“We have seen tremendous growth from Day One,” says Macchio. “The annual dining spend under management is now more than $2 billion and we have probably 100 of the Fortune 300 as well as most of the top pharmas and six of the top ten government contractors.”
While not revealing actual rebate numbers, positive reports of some $500,000 in annual rebates have been noted in recent years.
The concept works by smartphone app and website. Dinova works with travel departments and TMCs to track travelers’ dining expenditures through their registered corporate card numbers. Diners can choose member restaurants through app or website and simply present their corporate card. All discounts and rebates are managed automatically through the credit card on file. A plan for rewarding participating diners with their own system of dining points is in the offing for 2015.
While Dinova is the only company organically growing its own collection of restaurant members and integrating that list with business travelers, corporations and TMCs, it’s not the only player in the travel space looking to leverage the appetizing dining spend.
Tabling the Dining Question
Last November, Concur announced a partnership with Table8, a smartphone app that offers the freedom of “spontaneous dining” by creating space for last-minute reservations at the most popular restaurants that are usually sold out well in advance.
“We looked at the big spend categories – air, hotel, dining and dining has really been more like the cobbler’s stepchild in this space,” says Peter Goettner, CEO of Table8. “Dining simply has not been addressed yet.”
However, Goettner continues, “we see how much quicker business dining is growing over social dining. We love that number.”
Concur’s senior vice president of corporate strategy, Brian Camposano, notes the company is investing heavily in ways it can help business travelers have “The Perfect Trip” (which also happens to be the name of a division inside Concur that focuses on innovations in the business travel experience). To that end, Concur has partnered with 11 up-and-coming companies to date to add mobile tools, technology and convenience for business travelers to use.
“When Table8 launched in April we saw an opportunity to leverage the Concur platform with this application. We see a lot of data – north of $50 billion of dining spend annually – so this is clearly a critical number,” says Camposano. “Whether users are on road looking for meals or not, business dining is a critical element of where money is spent by end users and where we believe we can be influential through our innovative platform.”
With Concur, Table8 will be able to bring a density of usage to attract more of the right kinds of restaurants into the fold, Goettner adds. Restaurants in the system are heavily curated according to their popularity and buzz. The ability to secure a table at the super-popular A.O.C. restaurant in Los Angeles on a Wednesday night at 8:00 PM, for instance, could go a long way to impress an important prospect. The end result could be worth a lot more than the small fee (generally ranging from $5 to $30 depending on the restaurant, day and time).
Table8 currently operates in Los Angeles and San Francisco and expects to add choice restaurants in Washington, DC, Miami, Chicago and New York in the coming months.
Digging into Dining Data
A recent analysis of the dining spend in business travel offered by Concur revealed these tasty morsels of data:
While overall dining sales in the US grew approximately 1.4 percent from Q1 2013 to Q1 2014, Concur studied the dining habits of its business users and found that frequent business diners increased their dining spend by 6 percent within the same period. This business dining spend represents a variety of expense types including meals while traveling, client meetings and team outings.
Business dining has averaged a five percent increase year-over-year – indicating that business dining continues to be a top expense for employees. This growth in business dining spend at a faster rate than its leisure counterpart is similar to the accelerated growth seen in corporate air, hotel and ground transportation spend.
Business diners are most active Tuesdays through Thursdays, and Wednesdays are consistently the busiest day of the week for business dining. Thus, restaurants that can effectively target business diners can have a more consistent flow of patrons throughout the week, and a more sustainable business.
Among Concur’s 25 million users, New York, Chicago and San Francisco were the top three business dining cities by total spend for the 12-month period from August 2013.
Within the same 12-month period, the most generous business spenders were found in New York ($152 per dining check); Boston ($121 per dining check); Miami ($120 per dining check); Chicago ($118 per dining check); San Francisco ($117 per dining check).
In the last 12 months, business users from technology companies transacted most frequently (about five times per person), but were the second lowest category in business dining, at $84 per check. During the same timeframe, financial company employees transacted less frequently (about 3 times per person), but spent the most in business dining, at $123 per check.
“Still, we walk a fine line,” says Camposano. “We need to meet the needs of end users and also meet the needs of our corporate customers. But end users need these apps and if we don’t provide them they will find them in other ways and other places. Now we’re enabling that spend to be audited as data is drawn from Table8 and other companies, and that data trail is bringing a lot more clarity to line items.”
Meanwhile, other TMCs are taking their time before putting dining spend on the travel management menu.
Eric Jongeling, director of hotel solutions for CWT Solutions Group, sees the dining spend cropping up more and more in conversations but not necessarily moving to the action list.
“As companies get a better handle on support services that are procured, this may be the next option to look into,” he says. “But conversations are mostly on policy changes and spending caps when it comes to dining. Companies want to be aligned with peers on per diems and that puts the focus on spending.”
However, a recent traveler’s survey conducted by Carlson Wagonlit centered on stress triggers and found that dining, or dining food choices, shows up large and looming when it comes to stress factors business travelers must manage while on the road.
“Not being able to Eat Healthy” while on the road was given a “medium-high” score of 62 in the survey’s rating system, just below having to take “Last Minute Requested Trips” and “Staying in Inconvenient Hotel Locations.”
And while Carlson has been able to create some important dining relationships for business travelers, such as negotiating discounts at hotel restaurants, the capturing and managing of the dining spend beyond such measures is not yet on the table for the global travel network.
“This may be something we look at in the future, perhaps making recommendations and developing a word of mouth recommendation platform through the ‘To Go” app. But there is no road map yet,” says Jongeling.
Whether dining as an expense can be controlled, counted, managed, monitored and remunerated as a regular matter of corporate procurement policy is yet to be seen. But chances are whatever evolutions are in the offing they will involve using a corporate credit card and a smartphone application.
“When talking about the whole sharing economy, it’s worth mentioning that lots of apps are popping up in the dining space that business travelers might use,” notes BCD Travel’s Moscovici. “For example, with Eatfeastly and others that are popping up – you can order a pan of a private lasagna or a fast dinner for eight at an impromptu meeting or conference. It’s an important thing for travel managers to know what is going on in this emerging space,” she adds.
“Is it too soon to tell? We’re all watching it. And wonderful alternative solutions to how business travelers can manage their dining spend are coming into view every day.”
