The Return of the Business Lunch
For a brief period during the height of remote work, it seemed the handshake deal made over a white tablecloth was extinct. However, recent financial data tells a different story. Expense reports and credit card transaction data reveal that client entertainment is not only recovering, but it is also evolving to fit the new hybrid work economy. Professionals are once again recognizing that face-to-face dining offers a level of connection that a video call simply cannot replicate.
The Data: Spending Bounces Back
The snippet provided highlights a surge in expense report data, and broader market analysis supports this trend. According to data from expense management platforms like Brex and Ramp, travel and entertainment (T&E) spending has seen consistent quarter-over-quarter growth throughout 2023 and into 2024.
Several key metrics illustrate this resurgence:
- Transaction Volume: The sheer number of restaurant transactions on corporate cards has climbed back toward 2019 baselines.
- Check Averages: Inflation plays a role here. The average business lunch bill is significantly higher than it was four years ago due to menu price increases.
- Frequency: While daily casual lunches are down due to hybrid work, high-stakes client lunches are up.
Mastercard Economics Institute has noted a shift toward the “experience economy.” Businesses are prioritizing spending on services and relationship-building over physical goods. This aligns with the return of the “power lunch,” though the definition of that lunch has shifted.
The New Dynamics of the "Power Lunch"
The business lunch of the 1980s or even the early 2000s looked different than it does today. The specific nature of these meetings has changed to accommodate tighter schedules and health-conscious professionals.
The End of the “Three-Martini” Era
The days of heavy drinking during the workday are largely over. Modern data suggests a sharp decline in alcohol expenses during lunch hours.
- Mocktails and Sparkling Water: High-end sparkling waters (like San Pellegrino) and sophisticated non-alcoholic cocktails are now the standard order.
- Focus on Clarity: The goal is productivity. Executives want to remain sharp for afternoon meetings, making heavy meals and alcohol less desirable.
Time Efficiency
In the pre-pandemic era, a lunch might drag on for two hours. Today, efficiency is highly valued.
- The 60-Minute Hard Stop: Most reservations and meetings are now capped at 60 to 90 minutes.
- Reservation Platforms: Apps like Resy and OpenTable report that 12:00 PM and 1:00 PM slots are the first to fill up in financial districts, indicating a strict adherence to traditional lunch hours.
Where the Money is Going: Venues and Locations
The resurgence is most visible in major financial and tech hubs. Specific venues are seeing a return of the “regular” crowd.
New York City and London
In New York, establishments like The Grill and Le Bernardin report robust weekday lunch crowds. These venues cater to high-net-worth clients where the atmosphere is as important as the food. In London, private members’ clubs and high-end steakhouses in Canary Wharf are seeing booking numbers rivaling pre-2020 statistics.
The Rise of “Third Spaces”
Because many offices are downsizing, the restaurant has become a surrogate conference room. It is a neutral ground.
- Quiet Zoning: Restaurants are adapting by offering “quiet zones” or booths with better acoustics to facilitate conversation without shouting over music.
- Tech-Friendly: It is increasingly common to see tablets or laptops on the table alongside the appetizers as teams review data in real-time.
The Tax Reality for 2024
A critical component of this spending surge involves the IRS tax code. During 2021 and 2022, the U.S. government allowed a temporary 100% tax deduction for business meals to support the struggling restaurant industry.
Current Rules:
- As of 2023 and continuing into 2024, the deduction has reverted to 50%.
- Despite the reduced tax benefit, spending has not slowed down. This indicates that businesses view client dining as a necessary investment for growth rather than just a tax write-off.
Best Practices for the Modern Business Lunch
If you are looking to reintegrate client entertainment into your strategy, follow these modern guidelines to ensure a return on investment.
1. Choose the Right Venue
Avoid noisy sports bars or trendy spots with loud music. Select a venue known for consistency. Chains like The Capital Grille or Seasons 52 are popular for business because the service is predictable and the environment is controlled.
2. Handle the Check discreetly
The “dance” for the check can be awkward.
- Pre-payment: Some upscale venues allow you to provide a credit card when reserving.
- The Hand-off: Arrive early and give your card to the server before the guest arrives. Instruct them to run the bill automatically at the end of the meal.
3. Dietary Awareness
In 2024, dietary preferences are more varied than ever. Before choosing a steakhouse, check if your client is plant-based or gluten-free. Sending a quick text asking, “Do you have any dietary restrictions I should keep in mind for our lunch?” shows respect and attention to detail.
Frequently Asked Questions
Is the business lunch 100% tax deductible in 2024?
No. The temporary 100% deduction expired at the end of 2022. For the 2023 and 2024 tax years, business meals are generally 50% deductible. This applies to meals with clients, prospects, or business meetings with employees.
How much should I budget per person for a business lunch?
This depends heavily on the city. In major hubs like NYC, San Francisco, or London, a standard business lunch at a reputable venue often runs between $60 and $100 per person, including tax and tip. In smaller markets, $30 to $50 per person is more common.
Is it appropriate to order alcohol at a business lunch?
Generally, it is safer to decline unless the client orders first or the occasion is celebratory. Even then, limiting consumption to one glass of wine or beer is the professional standard.
Do expense reports require receipts for all meals?
Most corporate policies require receipts for any expense over $25 or $50. However, the IRS requires documentary evidence (receipts) for expenses of $75 or more. Best practice is to photograph and upload every receipt immediately using your expense management app.