Dining out is often considered discretionary spending. The increasingly bleak economic outlook is causing restaurant owners to brace themselves for a very challenging year ahead. Dick Williams, culinary advisor for OPENForum.com, a new small business resource developed by American Express OPEN, is predicting the following trends for restaurant owners for the remainder of 2008 into 2009:

• Business entertaining and corporate parties will continue to be pulled back. Given economic uncertainty in key industries, restaurant owners can expect to see significantly less holiday business. Industry experts report bookings are down about 15 percent for the 2008 holiday season as compared to the same period last year.
• The real estate market will offer relief. The softening of real estate prices and decrease in demand for restaurant sites is benefiting strong restaurant companies. Developers are offering better deals, and while rents have not decreased yet, they are likely to soften in the next year.
• Menu prices will increase. Menu prices increased 4.3 percent in 2008. With food costs expected to increase by 7 to 9 percent in 2009, restaurant owners will pass along costs to diners to maintain margins.
• Currency exchange will weigh on restaurateurs. Many fine-dining restaurants, particularly those in major cities, have benefited from foreign tourists taking advantage of the strength of the Euro and British Pound against the American dollar. While this customer base was strong in 2008, many are concerned that as economic turmoil spreads to the rest of the world, fewer visitors will be coming to the U.S. in 2009.