• by Teresa Buyikian , September 26, 2023

While the top 25 U.S. event markets have seen a 90% recovery in business since the pandemic, hybrid work schedules and rising restaurant pricing continue to negatively impact the business dining industry. 

Those insights were revealed in the Q3 2023 State of Business Dining Report from Dinova, which operates BtoB business dining programs, and Technomic, provider of foodservice insights.

The report highlights the impacts of sustainability, hybrid work and the return of in-person events on the dining industry. It utilizes Dinova data incorporated with Technomic's consumer insights for context.

Overall, business dining has reached a “new normal,” with a Business Dinning Index (BDIndex) of 88 –- a number that has hovered between 85 and 92 for the past 12 months. A BDIndex score of 100 would signal a return to pre-pandemic levels. Technomic’s consumer spend index rose to 115 in 2023, mostly due to higher check totals.

As average office occupancy is now an estimated 50%, a third of employees continue to maintain hybrid schedules, with Tuesday being the top in-office day. Although restaurants in busy downtown areas are seeing sales back to pre-pandemic levels, this only applies to traffic on Tuesdays, Wednesdays, and Thursdays. Despite the decrease in Friday-Monday traffic, small businesses continue to actually outperform the big chains.

Due to hybrid schedules, companies are seeking ways to build culture and invest in physical face-to-face connections in real life. This trend is increasing demand for corporate meetings and events, which resulted in June 2023 meeting volume up 30% over 2022. The top 25 U.S. event markets have seen a 90% recovery in business since the pandemic, according to additional Knowland data.

"The latest business and consumer dining data tell a tale of two segments," said Dinova CEO Alison Quinn in the report. "While tightening budgets and inflation negatively impact consumer restaurant traffic, businesses are investing heavily in face-to-face connections — typically with food and drink as the centerpiece."

The report also found higher in-restaurant pricing negatively affecting dining-out frequency.  Restaurants may have reported a 57% increase in the total cost of consumers’ meals between Q1 and Q2 2023, but much of this can be attributed to higher menu prices. During the same time frame, restaurants saw a 30% average decrease in foot traffic as more customers pulled back on dining out.

As companies strive to fulfill sustainability commitments and more than 700 of the largest publicly traded companies have made net zero carbon emissions commitments, sustainability has become a leading decision factor when choosing vendors. Sixty-five percent of businesses report sustainability is their most important initiative. Most consumers are willing to pay 10% more for a sustainable meal, and judge restaurants on food waste management, use of packaging materials, emissions from distribution, resources used in production, source of raw materials, emissions from production, measures to offset emissions, and location of production as primary concerns.

The report’s methodology includes utilizing data from companies that have participated in the Dinova program from 2019-2023, data from the top 1,500 US restaurant brands, and more than five years of pre-pandemic business dining sales data.