Business Dining is Key Contributor To Restaurant Revenue
Concur, the provider of spend management solutions and services, released an analysis today showing business dining is helping fuel a rise in restaurant revenue.
Supported by insights from Table8, the analysis also sheds light on business dining trends in the U.S. that restaurants can leverage to effectively increase revenue by targeting business diners.
Table8 is primarily backed by Concur’s Perfect Trip Fund, and offers patrons exclusive last minute access to sold-out restaurant reservations.
According to the National Restaurant Association, total restaurant sales hit a record high in October 2014, and sales are likely to continue rising in the coming months. Business dining, a key driver for restaurant revenue, is expected to contribute significantly to this uptrend.
The analysis shows:
- Business Dining Is a Bright Spot in Overall Dining Sales: While overall dining sales in the U.S. 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 Is a Top Employee Expense: Notably, since 2011, business dining has averaged a 5 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 leisure dining is similar to the accelerated growth seen in corporate air, hotel, and ground transportation spend.
- Busiest Business Dining Days Balance Revenue for Restaurants: Business diners are most active Tuesdays through Thursdays, and Wednesdays are consistently the busiest day of the week for business dining. Reservation data from Table8 shows that leisure dining peaks on Fridays and Saturdays. Thus, restaurants that can effectively target business diners can have a more consistent flow of patrons throughout the week.
- Best Cities for Business Dining: Among Concur’s 25 million users, New York City, Chicago, and San Francisco were the top three business-dining cities by total spend for the 12-month period from August 2013.
- Most Extravagant Business Diners: 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); and San Francisco ($117 per dining check).
- When More Is Less: Interestingly, in the last 12 months, business users from technology companies transacted most frequently (about five times per person), but spent the second lowest in business dining, at $84 per check. During the same timeframe, financial company employees transacted less frequently (about three times per person), but spent the most in business dining, at $123 per check.
“Business dining is big business, especially right now, as our data shows. From our Expense IQ Reportof last year, dining ranked as the third largest spend category for companies in the U.S., trailing only airfare and lodging,” says Brian Camposano, senior vice president of corporate strategy, Concur. “With business travel predicted to rise in 2015, we expect to see overall corporate expenditure, especially for business dining, go up as well.”
For restaurants, these insights present opportunities to pursue business diners.
“Our restaurant partners tell us that business diners typically spend up to two to three times more than the average social diner,” says Table8 CEO Peter Goettner. “Restaurants that recognize the importance of business diners can devise smart marketing strategies to attract more business diners through their doors and increase margins on days of the week where they typically see lower traffic from the social diner.”
“Business dining is critical to the success of the Lark Creek restaurants,” says Quinn McKenna, senior vice president of operations for Lark Creek Restaurant Group. “Building strong relationships with local diners fills seats on the weekends and holidays, while business diners keep us busy for lunch and mid-week dinners. At our 15 restaurants, we find that business diners spend more per person and dine in larger groups.”
Lark Creek Restaurant Group operates 15 fine-dining restaurants in the San Francisco Bay area and Southern California.
“Business travelers tastes and focus on quality and diversity of venues has evolved significantly,” says Ahmass Fakahany, CEO and owner of the Altamarea Group and Table8 Advisor. “It is no longer only about a basic business meeting in a restaurant; it is now about dining in the right setting, enjoying quality food, and receiving high client attention simultaneously.”
Original article by FSR