American Express Global Business Travel reported a nearly steady recovery rate in transactions for the third quarter, although executives said the company is seeing momentum in the coming months from a late-quarter pickup in corporate travel.
The mega travel management company’s transactions in the third quarter were 29 percent below pre-pandemic levels of 2019, a slight uptick from the second quarter, when they were 31 percent below 2019 levels. That quarter had a much larger jump, however, with first quarter transactions 53 percent below 2019 levels.
Amex GBT CEO Paul Abbott in an earnings call said transactions were “softer” in July and August, amid supply constraints and “higher levels of disruption at airlines and airports.” Booking “increased significantly” after Labor Day, however, and that has continued through October, when transactions hit 76 percent of 2019 levels, he said.
In an October survey of Amex GBT’s top 125 customers, 95 percent said they planned to either increase business travel spend or keep it flat next year compared with this year, Abbott said. He also cited a Morgan Stanley survey of 100 travel buyers in October in which they said 2023 travel budgets on average will be 98 percent of 2019 levels, and about half said 2023 budgets would be higher than 2019.
“While our planning is not yet complete, our current view is that we will continue to see solid growth in 2023,” Abbott said. “At this point, we are planning for a revenue recovery in the high 70s [percentage] for 2023.”
Small and midsize client transaction recovery continued to outpace large clients in the quarter, with SME transactions at 80 percent of 2019 levels—up one percentage point from previous quarter—and large client transactions at 61 percent, up two percentage points.
Abbott said of the $4.1 billion in new client wins over the past year, $2.5 billion has come from SME clients. Of those SMEs, about half of the clients previously did not have managed travel programs, he said.
In terms of regions, the Americas lags slightly in its transaction recovery with a 68 percent recovery level for the quarter, up from 65 percent in the second quarter. Transactions in Europe, the Middle East and Africa were at 72 percent of 2019 levels in the quarter, which was a drop from 74 percent recovery in the second quarter. Asia/Pacific transactions, meanwhile, improved to 78 percent of 2019 levels, up nine percentage points from the previous quarter, which Abbott attributed to loosening restrictions and largely from business in Australia and India.
Reported recovery rates are adjusted to account for Amex GBT’s acquisitions of Egencia and Ovation Travel Group.
Abbott also said, amid industry-wide staffing challenges, Amex GBT has “absolutely” hit its target headcount for the moment, as the TMC has done “a lot of hiring” and is now focused on training. “Broadly speaking, we have the headcount we need to carry us through the next period,” Abbott said.
Amex GBT reported a net loss of $73 million for the quarter, compared with a net loss of $106 million in the third quarter of 2021.
Amex GBT Q2 earnings
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