What Counts as a “Reasonable” Business Meal Expense in Today’s Economic Environment?

We have all felt the effects of inflation. According to the US Inflation Calculator, the average annual inflation rate since 2020 is 4%—more than double the rate of the previous decade. While our own wallets have felt that hit, organizations are scrambling to adjust expense limits to keep up.

Unfortunately, the extreme volatility and sharp increase in costs have made it difficult to figure out what limits are reasonable. In 2019, if a company sent an employee on a 3-day, 2-night business trip, the average total cost for flights, lodging, meals, and ground transit would come to about $975. Today, that same trip costs between $1,100 and $1,330.^1*

One of the largest increases causing the jump in travel expenses is meals. In 2010, an average dinner in the US was $20. In 2020, that number increased to $27. Now, the average dinner is $40. And that’s just the national average. If you sent an employee to a hyper-inflation hot spot, such as New York, the average dinner skyrockets to $55. Meanwhile, if you route that traveler to a more affordable dining city, such as Houston or Dallas, that number falls to just $30.^2*

So, what counts as a reasonable meal, and how should you keep your policies dynamic during times of volatility?

*See methodology in footnotes for calculating cost averages by year.

Why “Reasonable” Is No Longer a Fixed Number

The challenge for finance and travel managers is that there is no universal definition of a reasonable meal expense. As illustrated before, a $40 dinner might be excessive in one location and impossible to find in another.

Many organizations historically relied on fixed meal limits or annual per diem rates. While these benchmarks remain useful, they don't always account for today's realities:

• Regional cost differences
• Inflation that varies by market
• Airport and hotel pricing premiums
• Client entertainment expectations
• Last-minute business travel

As a result, more organizations are moving away from treating meal expenses as a simple dollar threshold and instead evaluating them based on context. A reasonable meal in 2026 is an expense that aligns with the location, business purpose, and circumstances of the trip.

Common Meal Expense Scenarios

To illustrate this challenge, let's look at some common situations travel and expense teams encounter.

Scenario 1: The High-Cost City

An employee travels to New York City, San Francisco, London, or Singapore and submits a $35 lunch expense.

In many markets, that amount might trigger scrutiny. In others, especially in business districts or near conference venues, it may be entirely normal.

Approvers should consider local pricing realities before comparing expenses against a company-wide average.

Scenario 2: Meals During Travel Disruptions

A flight cancellation strands a traveler overnight, forcing them to purchase dinner at an airport restaurant or hotel.

While the expense may exceed normal expectations, the circumstance matters. Employees generally have limited dining options during travel disruptions, and policies should allow sufficient flexibility for these situations.

Scenario 3: Client or Team Meals

A traveler submits a $120 dinner expense for three colleagues after an all-day customer meeting.

Viewed in isolation, the total may appear high. However, when divided across attendees and evaluated against the business purpose, the expense may be entirely reasonable.

Context often matters more than the amount itself.

Red Flags That May Require Additional Review

While flexibility is important, there are still situations that warrant closer examination.

Some common warning signs include:

• Meal expenses that consistently exceed local averages
• Multiple alcoholic beverages submitted without a clear business purpose
• Duplicate meal claims for the same date and time
• Expenses that significantly exceed company guidelines without explanation
• Repeated exceptions from the same employee

Instead of creating a culture of suspicion, organizations should focus on identifying patterns that suggest the need for coaching, clarification, or policy adjustments.

Best Practices for Employees and Approvers

For Employees:

If a meal exceeds normal expectations, provide context.

Simple details such as a customer meeting, airport delay, conference venue pricing, or limited dining availability can help approvers quickly understand the business rationale behind an expense.

Tip for employees: Don't let uncertainty prevent you from submitting legitimate business expenses.

According to the 8^th Annual SAP Concur Global Business Travel Survey, 25% of business travelers have chosen not to submit a legitimate expense to avoid drawing attention to themselves or the expense. Among those travelers, 24% said they didn't submit the expense because it would have put them over their pre-approved travel budget.

If an expense is business-related and reasonable for the circumstances, submitting clear documentation and context is often better than assuming it will be rejected. 

For Approvers:

Before rejecting a meal expense, ask three questions:

1. Was the expense business-related?
2. Was the amount reasonable for that location and circumstance?
3. Is this part of a pattern or an isolated occurrence?

Taking a consistent approach to these questions can reduce approval friction and improve the employee experience.

What Leading Organizations Are Doing Differently

Increasingly, companies are shifting from rigid limits to guideline-based policies.

Rather than saying, "Lunch cannot exceed $20," organizations are providing:

• Regional benchmarks
• City-specific per diem references
• Guidance for exceptional circumstances
• Clear examples of acceptable and unacceptable expenses

This approach gives employees more confidence while helping approvers make fair and consistent decisions.

Many finance leaders are also reviewing meal spending data more frequently to ensure policies keep pace with changing economic conditions.

Helpful Resource: Compare Travel Costs by Destination

The Business Travel News Corporate Travel Index Calculator is a free resource that benchmarks business travel costs across more than 200 global cities, including estimated lodging, transportation, and meal expenses. It can be a useful reference point when evaluating expense policies or reviewing travel spend in unfamiliar destinations.

Try the tool: Business Travel News Corporate Travel Index Calculator

Building a Policy That Can Adapt to Change

In today's economic environment, defining a reasonable meal expense is less about enforcing a fixed dollar amount and more about balancing cost control, fairness, and common sense.

The organizations that manage meal expenses most effectively recognize that context matters. By combining clear guidelines, thoughtful approvals, and regular policy reviews, companies can control costs while still supporting employees on the road.

After all, a reasonable meal in 2026 isn't defined by a single number—it's defined by whether the expense makes sense for the situation.

Ready to Take a Fresh Look at Your Meal Expense Policy?

Rising costs and changing travel expectations may have created gaps between your policy and today's reality. Whether you're reviewing meal limits, per diem guidelines, or approval workflows, now is a good time to assess whether your policies still reflect current business travel conditions.

Resources to help you get started:

• Expense Policy Template: Review and update your meal guidelines, approval thresholds, and exception processes with a customizable policy framework.
• 8^th Annual SAP Concur Global Business Travel Survey: See how business travel continues to evolve and learn what travelers and travel managers say about rising costs, changing expectations, and the future of business travel.
• Business Travel News Corporate Travel Index Calculator: Benchmark estimated business travel costs—including meals, lodging, and transportation—across more than 200 global cities to better understand regional pricing differences and evaluate policy thresholds.

Footnotes: Methodology for Average Cost Calculations by Year

1. The average 3-day, 2-night business trip costs were calculated using the following sources:

• Airfare - U.S. Department of Transportation (DOT) Domestic Airfare Data: In 2019, the average domestic round-trip itinerary cost $352. In 2026, it’s about $428.
• Lodging - Business Travel News (BTN) Corporate Travel Index: BTN's 2019 data tracked average corporate mid-tier lodging at $170 per night ($340 for the entire trip). In 2026, it’s between $180-$270 per night ($360-$540 for the entire trip).
• Meals - U.S. General Services Administration (GSA) Per Diem Rates: The 2019 standard baseline allocation for meals was $55 per day ($165 for the entire trip). In 2026, the standard baseline allocation for meals is $68 per day ($204 for the entire trip).
• Ground Transportation - Business Travel Index by Engine: In 2019, local transit and airport taxi calculators placed standard point-to-point urban transit at $118. In 2026, it’s between $110-$150.

2. The average dinner cost is all-inclusive—meal, soft drink, local tax, and a standard 18% tip. These costs came from the following sources:

• 2010 meal cost: Restaurant News Industry Tracking
• 2020 and 2026 meal costs: National Restaurant Association Inflation Data
• City-specific dinner costs for 2026: National Restaurant Association’s localized tracking metrics