American Express Global Business Travel (Amex GBT) has reported impressive growth in spend and transactions among its global multinational companies in the second quarter of the year. According to Amex GBT CEO Paul Abbott, total transactions from global multinational companies increased by 7 per cent year over year in Q2, while transactions among small and mid-sized companies (SMEs) increased by 1 per cent.
However, the growth rates have slowed compared to the first quarter of 2024. In Q1, transactions from global multinational clients increased by 11 per cent year over year, while SME transactions rose by 5 per cent. Despite this slowdown, Amex GBT reported a 5 per cent increase in total transaction value to $7.7 billion in Q2. Total revenues for the quarter, including travel and product and professional services, increased by 6 per cent to $625 million, with adjusted EBITDA growing by 20 per cent year over year to $127 million.
The slowdown in the second quarter was primarily attributed to slower same store sales and the impact of the ongoing Olympics in France, which is the TMC’s second-largest country in terms of transaction volume. Transactions in France saw a rapid deceleration in Q2, ending the quarter down by 4 per cent, resulting in a negative impact on year-over-year total transaction growth by 1 percentage point. However, Abbott expressed confidence that France would bounce back with a return to growth from September onwards.
In the second quarter, Amex GBT saw significant growth among its top five industry verticals, which account for more than 60 per cent of global multinational transactions. These include the financial services and insurance sectors (up 13 per cent), pharma and healthcare sector (up 12 per cent), information technology (up 9 per cent), mining, oil, energy, and utilities (up 7 per cent), and business and professional services (up 6 per cent). On the other hand, growth among SME clients was relatively muted due to tighter spending controls in the face of sustained higher interest costs and inflation.
Despite the challenges, a recent survey of Amex GBT’s top 120 SME customers showed that 82 per cent expect travel spend to grow or remain flat in the second half of the year. The TMC also reported $2 billion worth of new business wins from SMEs in the last 12 months, with Abbott stating that this segment remains their biggest growth opportunity.
Abbott also highlighted the company’s solid foundation and strong customer retention rate, reaching 98 per cent among multinational clients in the last 12 months. A recent survey of Amex GBT’s global multinational customers revealed that the top 100 customers expect travel spend to be up approximately 10 per cent year over year for the full year 2024, marking a 2 percentage-point increase from the previous Q1 survey.
The planned acquisition of CWT by Amex GBT was also addressed during the earnings call. The acquisition is currently being investigated by the UK’s Competition and Markets Authority (CMA), with the TMC working collaboratively with the CMA as it carries out its phase 2 investigation. Amex GBT’s chief legal officer and global head of M&A, Eric Bock, expressed confidence that the acquisition would close in the first quarter, as they believe the facts will play out in their favor and that the competitive environment remains intense with many competitors.
In conclusion, Amex GBT’s continued growth among global multinational companies showcases its resilience and adaptability in the face of challenges. With a strong focus on customer retention and new business opportunities, the TMC is well-positioned to navigate the evolving landscape of business travel and emerge stronger in the future.
