Australian Companies Have Some of the World’s Highest Meal Expense Limits

Australian business travellers are enjoying one of the highest meal expenditure allowances in the world, with meal limits of as much as $109 per dinner, according to a new whitepaper from American Express Global Business Travel (GBT).

Meal expenditure limits are seen as the third-largest corporate travel and expense (T&E) category after air and hotel expenses, but can be the most difficult category to manage. Factors influencing meal spend include:

• the attitude of the employee’s line manager
• rate variance between countries
• food preferences and dining styles
• cultural differences, home country, age, and other demographics.

The report recommends implementing standardised global meal policies with limits set by destination. Flexibility is key – for example, a business traveller should be able to spend beyond a meal limit so long as they stay within the prescribed daily quota.

Organisations should aspire to gain the same level of visibility in meal spend as they have in other travel categories such as flight and hotel bookings. Meal expense data can then be mobilised by procurement professionals to negotiate the best rate with preferred dining programs. App-based technologies will increasingly assist in tracking and supporting meal expense behaviours.

Cost-conscious cultures and meal expense limits

One of the issues with setting meal expense limits is that travellers may be tempted to spend the whole allowance on each day of travel. This might involve ordering an extra drink or dessert at the end of a meal, or ordering room service which always comes with inflated prices.

Euan Granger, a Category Manager with Glasgow City Council who has worked as a consultant in Australian procurement, responded to the report on Twitter by noting that the UK meal limits are the highest in the world:

“In the past, I’ve seen [colleagues] encouraged to spend all the meal allowance even when they didn’t need to – there’s no policing of it.”  

This situation may be exacerbated by a lack of reward or recognition for those who spend less on meals and treat their organisation’s money as if it were their own. One solution is to “split the difference”, where employees are paid 50 per cent of the savings if they finish the day under their allocated meal budget. This creates a win-win for both the traveller and the company, although there is a risk that ultra-frugal travellers may be tempted to save extra money by (for example) eating a meal in a cheap restaurant in an unsafe part of town.

Getting expense limits right 

Data is your greatest weapon when it comes to setting accurate and fair meal expense limits. Getting the numbers right takes time and research, with as little guesswork as possible. Travel category managers should be willing to adjust the limits upwards if the data shows that travellers are regularly overspending.

One final point to keep in mind is that meal expense limits can be a sensitive area in many organisations. While some employees may love life on the road, many see business travel as a chore, which is why perks such as good meals and comfortable hotel rooms are important to keeping your travellers content.

A copy of Amex GBT’s meal expense whitepaper, ‘Savings for Cravings’, can be downloaded here.