Amex GBT: Large Client Travel Demand Accelerating

American Express Global Business Travel has upped its revenue outlook for this year as business travel recovery has shown “strong momentum,” CEO Paul Abbott said in an earnings call on Tuesday.

For the first quarter, Amex GBT reported $350 million in revenue, up 179 percent compared with the first quarter of 2021 and half of pre-pandemic levels in 2019. Transactions for the quarter were at 46 percent of pre-pandemic levels, but they began to pick up quickly in April, according to Abbott. For the last three weeks of April, transactions reached 72 percent of 2019 levels, an improvement of 11 percentage points compared with recovery levels in the last week of March, he said.

Comparisons include adjustments accounting for Amex GBT’s acquisitions of both Egencia and Ovation Travel Group.

Small and midsized companies have been leading the recovery, but travel from larger customers also has begun to “really accelerate,” Abbott said. In April, recovery among large global clients improved 8 percentage points compared with March.

International travel recovery also is catching up to domestic recovery as restrictions lift, Abbott said.

Demand for smaller meetings has been “particularly strong,” which Abbott attributed to workforces remaining more spread out rather than concentrated in central offices. “More distributed teams increase the need to bring people together to collaborate, to innovate, to motivate and learn,” he said.

Amex GBT reported a client retention rate of 95 percent over the past 12 months, and Abbott noted that since 2015 the company has averaged a $2.50 gain in new customers for every dollar of business lost. Recent new customer wins have included Honda Motors Europe, Novum, Raytheon Technologies and The Ferraro Group, Abbott said.

Given the pace of recovery, Amex GBT has added $150 million to its total expected revenue for 2022, which it now expects will be about $1.75 billion. Amex GBT reported a net loss of $91 million for the quarter, compared with a net loss of $135 million in the first quarter of 2021.

Amex GBT also noted that it expects its merger with a special purpose acquisition company Apollo Strategic Growth Capital to be completed later this month, at which point it will begin trading on the New York Stock Exchange.

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