Multinational travel spend outpaces SMEs in Amex GBT Q1 results

Large customer growth at American Express Global Business Travel (Amex GBT) outpaced that of small and mid-sized companies in the first quarter, and large customer sentiment on travel spending this year also has improved, the travel management company reported.

During the quarter, total transactions from global multinational companies increased 11 per cent year over year, beating the TMC’s expectations, Amex GBT CEO Paul Abbott said during an earnings call on Tuesday (7 May). 

The TMC reported “very positive same-store sales growth” across several industries, led by tech, which was up 30 per cent year over year, and professional services, pharma, mining, energy and utilities, all of which were up by double-digit percentages, he said. 

In a survey of Amex GBT’s 100 largest customers, they on average expect 2024 travel spending to be up 8 per cent year over year, up 4 percentage points compared with the survey the TMC announced last quarter. 

Similarly, the number of clients who expect to spend more on business travel this year compared with last year rose by 3 percentage points compared with the previous survey, Abbott said.

“That’s certainly an indicator we’ll see pretty strong growth from the segment for the full year,” he said.

SME transaction growth, meanwhile, increased 5 per cent year over year, which Abbott said was lower than he expected. “If you’d asked me back in Q4, I would have thought our growth rates for global multinational and SME would have been closer together,” Abbott said.

Part of the slower growth rate stems from the same issues outlined by the payment company American Express in its first-quarter earnings, where total spending — including goods and services as well as travel and entertainment — by US-based SME companies was up 1 per cent year over year, compared with a 5 per cent increase for large and global US companies. 

Those challenges include higher interest costs and sustained higher inflation, which has resulted in stronger controls on SME spending, Abbott said.

Companies on the larger end of the SME spectrum tended to have higher transaction increases than the smaller companies during the quarter, he said. 

“The smaller the business, the tighter the controls,” Abbott said. Even with those tighter controls, Abbott said the SME market remains the biggest growth opportunity for the TMC. 

Total customer wins, based on expected total transaction value, over the past 12 months from the first quarter totalled $3.3 billion, and $2 billion of that came from SME clients, Amex GBT reported.

Overall total transaction value at Amex GBT increased 9 per cent year over year to $8.1 billion during the first quarter. Transactions were up 6 per cent year over year, and Abbott noted that Amex GBT’s reporting has shifted to report transactions on a net basis, excluding cancellations, refunds and exchanges. 

Total revenue was up 6 per cent year over year to $610 million.

Abbott said Amex GBT’s $570 million acquisition of CWT remains on track to close in the second half of the year, pending regulatory approvals. The integration teams for the acquisition have been established, he said.

Amex GBT reported a net loss of $19 million for the first quarter, compared with a $27 million net loss in the first quarter of 2023.