Food and beverage spend when totted up can be a significant expense, particularly with escalating prices fuelled by inflation. The frequency and volume of purchases, especially for longer trips, can lead to spiralling costs, policy violations and potentially fraud. However, it is often left unmanaged.

“F&B spend is a blind spot for a lot of businesses, particularly in smaller to medium sized businesses or SMEs,” explains John Stephenson, Managing Director of Your Travel Corporate.

It’s hard to gauge the scale of the issue, since so-called F&B costs are often lumped in as incidentals. What’s spent is often dealt with post trip and involves sifting through hundreds of receipts to understand whether a meal was in policy. This can be time consuming. Yet, the challenge doesn’t just involve the occasional overpriced lunch, but the myriad of unnoticed expenses slipping through the auditing system. 

“Even when deals are in place, they can be overlooked due to poor communication — either from the hotel side or internally”

Today most companies have some form of F&B policy, yet smaller firms don’t tend to include much detail. “We have daily meal allowances or per diems, we also have set spend limits on meal type,” explains Charlie Gillmore, CEO of Gillmore British Design, an SME furniture company. However, these can sometimes be seen as a ‘use it or lose it’ entitlement rather than an allowance.

As Gillmore points out, it’s easier to manage costs when breakfast is included in hotel deals or room rates, since some properties give a discount at the on-site restaurant for guests. Unfortunately, even when deals are in place, they can be overlooked due to poor communication — either from the hotel side or internally. 

“Where a travel manager has negotiated a discount there are now tools that allow this information to be loaded and pushed to the traveller at the right time. This is crucial as otherwise the soft pound benefits may sit in a static intranet page and travellers will be completely unaware,” states Kerry Douglas, Head of Programme at the Institute of Travel Management (ITM).

Keeping track

Some of the biggest issues are knowing who’s responsible and having transparency on what’s spent. Often this goes beyond the travel buyer, where finance teams and individual department heads are involved. Data is fragmented and responsibilities diluted. It’s why travel tech firms and TMCs are leveraging data analytics to help monitor F&B spend more effectively.

“Having the data available allows companies to spot patterns, keep costs under control and make sure travel policy is working,” states Ann Thomas, Senior Account Manager at Clarity Business Travel.

With the right data corporates can also see if they have enough volume of trade in a certain city with a particular hotel chain. This can then allow better negotiated rates where F&B is included. “If you have the right data, you can also see if the amount being spent is giving enough return on investment, or whether certain divisions or individuals are taking advantage of the policy,” says Paul Dear, Vice President for EMEA Concur Travel, SAP Concur.

He adds: “Travel and expense management tools also help since they can clearly show travellers what’s on offer and what is on policy, from the initial point-of-sale through to the trip itself.”

“Having the data available allows companies to spot patterns, keep costs under control and make sure travel policy is working”

Currently, many businesses approach F&B tracking passively. Yet a proactive, multi-faceted auditing approach, which goes beyond basic transactional checks, can help.

For instance, AI specialist PredictX has a product that can detect and prevent non-compliance before it occurs, whether it’s identifying alcohol purchases that exceed policy limits, suspicious tip activity, or scrutinising meal claims out of working hours.

“Tracking expense data with this level of detail isn’t optional, it’s essential for financial control, risk mitigation and maintaining a robust expense culture,” details Ian Patmore, Vice President, Product at PredictX.

Buyers are using their own AI to actively monitor costs, instructing the gen-AI tool to read the travel policy, drill down on F&B spend and then actively interrogate expense claims to identify where purchases have exceeded the per diem rate or allocated spend. For instance, it can see whether the policy “no minibar, no room service unless pre-approved” has been broken. These incidences are then flagged to finance and the traveller in question.

“Some clients are very focused on actively monitoring F&B spend. For example, we have clients who will challenge any charges exceeding the agreed allowance,” details Lorraine Sergison, Account Manager at Gray Dawes Group.

On the cards

Virtual cards can also help manage limits on F&B spend, since amounts can be specified.  This allows expenditure to be managed centrally. In some cases the card can be integrated with online booking tools too.

“Companies can preload virtual cards with a set value, helping travellers stay in policy by controlling spend. This also allows businesses to capture spend data at the time of booking rather than relying on post-trip expense reports,” says Katie Skitterall, Group Commercial Director at Direct ATPI.