Each year, our SpendSmart report looks at some of the biggest trends in business travel spend over the past 12 months. Our team crunches through millions of expense entries to find out where people are spending their business travel dollars. We usually focus on areas such as flights and hotels, but the devastating impact that COVID has had on business travel is extremely well documented, so I’m not going to talk about that here.
But while people may not have been able to travel much on business during 2020 and 2021, one thing that they did continue to do on the company dime was eat. So that’s what we decided to look at for our first SpendSmart report of 2022. Diving deeper into the meal spend data has revealed some interesting trends over the past couple of years, particularly when it comes to where - and possibly what - people are eating.
Learn more: Emburse 2022 H1 SpendSmart infographic
As expected, expenses submitted for restaurants fell by about 30% across the board from 2019 to 2020, as COVID severely impacted restaurants’ capacity, and the desire for people to eat outside the home. Fast food expense submissions dropped by a little more, at 33%, but nothing vastly different. When people started to get back out into the world again in 2021, they obviously started to return to restaurants. Whether it was the first shoots of a business travel recovery or simply peoples’ desire to get back to meeting colleagues, customers and prospects in person, the overall number of meal submissions bounced right back. In fact, by the end of 2021, overall meal expenses were 3% higher than back in 2019.
Here’s where things get a bit interesting. Although the overall volume was back to normal, when we look at the most popular fast food/casual dining restaurants, the bounce wasn’t nearly as pronounced. Among the top chains in this sector, 2021’s expense levels were still down by 17% compared to pre-COVID. And while a small number of the most-expensed fast food chains were able to maintain or even increase the amount of meal expenses submitted, most of them took a significant (and sometimes huge) dive. And the sector that did worst of all was … coffee. Dunkin and Starbucks saw their 2021 volume from business travelers decrease by 21% and 29% respectively, dragging the whole sector down significantly. Whether this is tied to fewer people in airports, fewer overnight stays meaning fewer morning coffees, or simply people feeling on edge enough for two years to not need a double shot in the morning, remains to be seen.
But it wasn’t just the amount of times that people went to these restaurants that was telling, it was how much they were spending there. The restaurant category overall really didn’t see a huge amount of change through the past three years. Average expenses submitted were $93 in 2019, $95 in 2020 and $91 in 2021, and the fluctuations can probably be attributed to rising costs in the food supply chain, similar to those that we’re currently experiencing.
For fast food outlets, the 2019-2020 fall in average expense size was significant, and remained that way in 2021. Among the top 10 fast food brands, the average expense size went from $46 in 2019 to $34 in 2020 and then down to $30 in 2021. The only chain which seemed to be immune to this was Chipotle, whose average expense fell by under a dollar from 2019 to 2021 - just a couple of percentage points. Wendy’s was the hardest hit, with average transaction sizes down a whopping (not whopper) 58%. Several other chains saw two-year declines in the range of 50%, including Chick-fil-A, Panera and Taco Bell.
So what does all of this really mean? Given the seismic events of the past couple of years, there could be several reasons behind the drop off, so we’d need to look at a few more quarters’ data to make a definitive call. Maybe with the fear of COVID people simply wanted to eat less unhealthy food, or maybe they just decided after a long hiatus, they deserved some more upmarket dinners. But given that most fast food restaurants saw a significant decline in both the number of transactions and the average transaction size, it’s clear that business professionals made a very conscious decision to move away from fast food - and stay away.