News

Study: Corporations need to more closely monitor employees' dining expenses

June 7, 2016

Corporations might soon be tightening limits on money spent for business-related dining and catering if the findings of a new research study by Dinova LLC and The BTN Group garner much attention from upper management in the U.S.

The study — which polled 114 managers in areas related to corporate travel, cards or expenses — indicates that business dining expenses are one of the more under-managed areas of the corporate travel and entertainment budget, even though dining expenses represent 10 percent of annual travel and entertainment spending, according to a news release. This expense was one category in which corporations could realize significant cost savings with better oversight, the study found.

What's more, it represents a nice chunk of cash at most organizations. In fact, 40 percent of survey respondents said that their companies spent more than $1 million on food and entertainment last year. Additionally, study results show that while overall consumer spending on dining remained flat or down in 2015, nearly 40 percent of corporate travel managers polled said their company's spending on dining grew during the period. Typically the increase was due to more meals being purchased, increased catering, or large group carry-in orders.

A particularly interesting finding of the study is the breakdown of restaurant types involved in corporate dining expenses:

• 33 percent fast-casual;
• 34 percent independent restaurants;
• 16 percent chain dining establishments; and
• 14 percent quick service restaurants.

Just 10 percent of those polled said they spent at least half of their meal expenses on restaurants in their home markets; nearly 30 percent said they bought less than 10 percent of their meals at home; 55 percent said that increased dining expenses resulted from an increase in business travel.

Business meals seldom subject to close oversight

More than half of those polled said they never have looked at this area as a way to save on corporate spending. In fact, there's little reporting to management in this category. Twenty percent of respondents said that they've never provided management with a breakdown of dining expenses. Of those who do report these expenses to senior management:

•  39 percent said reports were provided upon request;
•  33 percent said reports were provided monthly;
•  14 percent said reports were provided quarterly; and
•   6 percent said reports were provided annually.

​"We estimate the business dining spend to be around $60 billion, and the ability to manage this spend is critical in overall T&E savings. It's found money," said Dinova Founder and CEO Vic Macchio.

"The research illustrates that far too many corporations are missing opportunities for quantifiable savings on business dining expenses, given that 52 percent of respondents haven't taken steps in the past two years to better manage this area and nearly a quarter couldn't identify whether their 2015 costs had changed from 2014," said BTN Group Vice President and Group Publisher Louis Magliaro.

The study is based on a survey of 114 corporate travel, card or expense managers across various industries, according to a news release.