American Express Global Business Travel has made gains in small and midsized business share over the past year, and the segment remains the company’s “biggest growth opportunity,” CEO Paul Abbott said in an earnings call on Tuesday.
During the first quarter, SME transactions increased 61 percent year over year, reaching just 12 percent shy of 2019 levels on a pro forma basis that takes into account the company’s acquisitions of Egencia and Ovation. By comparison, total transactions were at 76 percent of 2019 pro forma levels despite the same rate of year-over-year growth.
Over the 12 months ending March 31, Amex GBT reported new client wins totaling $3.4 billion of annual total transaction value, based on current recovery levels, and $2.2 billion of that was in the SME category. Nearly a third of new SME wins over that period were previously unmanaged programs, a segment that remains ripe for growth, Abbott said.
The SME segment “represents a total opportunity of $950 billion in travel spend,” he said. “Within the SME segment, we are the No. 1 player in managed travel, but only 30 percent of that $950 billion opportunity is actually managed today, providing a significant growth opportunity.”
Meetings and event recovery also outpaced the broader recovery rate in the first quarter, Abbott said, driven in part by hybrid work models and dispersed workforces. The number of M&E projects during the quarter hit 85 percent of 2019 levels, and M&E spending was higher than the first quarter of 2019, due to price inflation, larger events and more international destinations, he said.
Abbott listed M&E demand as one of the “tailwinds” for the company, alongside continued business recovery, improved airline capacity and marketshare gains.
In addition, Amex GBT is making “very good progress in increasing the ratio of hotel to air bookings,” which Abbott attributed to improved content and displays in Egencia and Neo. Hotel transaction growth year over year outpaced air transaction growth during the first quarter, at 62 percent and 60 percent, respectively, the company reported.
Total revenue for the first quarter increased 65 percent year over year to $578 million, including travel revenue growth of 82 percent and product and professional service revenue growth of 19 percent. Total transaction value grew 88 percent year over year to $7.4 billion.
Abbott noted that the company is beginning to focus less on comparisons to 2019 and instead will focus more on year-over-year and quarter-over-quarter comparisons.
“We’re starting to move away from recovery rates versus 2019,” he said. “2019 is four years ago now, and we sometimes run into reporting challenges with quarter-over-quarter analysis.”
Amex GBT reported a net loss of $27 million for the first quarter, an improvement from a $91 million net loss in the first quarter of 2022.
Amex GBT Q4 earnings
Stay connected with us on social media platform for instant update click here to join our Twitter, & Facebook
We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
Denial of responsibility! NewsAzi is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
