Amex GBT reports transaction boost after ‘softer’ summer. | Tech US News


American Express Global Business Travel reported a nearly flat rate of recovery in transactions for the third quarter, although executives said the company is seeing a boost in the coming months from a late-quarter recovery in corporate travel.

The mega travel management company’s third-quarter transactions were 29 percent below 2019’s pre-pandemic levels, up slightly from the second quarter, when they were 31 percent below 2019’s levels. No however, that quarter saw a much bigger jump, with first-quarter transactions 53 percent below 2019 levels.

Amex GBT CEO Paul Abbott said in an earnings call that transactions were “softer” in July and August amid supply constraints and “higher levels of disruption at airlines and airports.” However, bookings “increased significantly” after Labor Day, and continued through October, when transactions reached 76 percent of 2019 levels, he said.

In an October survey of the top 125 Amex GBT customers, 95 percent said they planned to increase or hold business travel spending next year compared to this year, Abbott said. He also cited a Morgan Stanley survey of 100 travel buyers in October that said 2023 travel budgets will average 98 percent of 2019 levels, with about half saying 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. “Right now, we’re planning for a recovery of income in the 70s [percentage] by 2023″.

The recovery in small and medium customer transactions continued to outpace large customers in the quarter, with SMB transactions at 80 percent of 2019 levels, up one percentage point from the previous quarter, and large customer transactions at 61 percent, two percentage points more.

Abbott said that of the $4.1 billion in new client wins over the past year, $2.5 billion came from SMB clients. Of these SMEs, about half of the clients previously had no managed travel programs, he said.

In terms of regions, the Americas is slightly behind in its transaction recovery with a recovery level of 68 percent in the quarter, compared to 65 percent in the second quarter. Transactions in Europe, the Middle East and Africa were at 72 percent of 2019 levels in the quarter, down from the 74 percent recovery in the second quarter. Meanwhile, Asia-Pacific transactions improved to 78 percent of 2019 levels, up nine percentage points from the previous quarter, which Abbott attributed to the easing of restrictions and largely to 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 that amid staffing challenges in the industry, Amex GBT has “absolutely” hit its target staff for now as TMC has done “a lot of recruitment” and is now focused on training. “Broadly speaking, we’ve got the squad we need to take us into the next term,” Abbott said.

Amex GBT reported a net loss of $73 million for the quarter, compared to a net loss of $106 million in the third quarter of 2021.

RELATED: Amex GBT Q2 earnings


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