The Business Platinum Card® from American Express might come with a high annual fee, but it also has a whole lot of credit card perks.
08.05.2024 - 02:47 / skift.com / Dennis Schaal / Paul Abbott
Much of the discussion about business travel revolves around large corporations that have strict managed-travel policies. They require employees to book trips through sanctioned tools and at hotels and airlines that give corporations volume discounts.
In the first quarter, those corporations delivered significant gains for American Express Global Business Travel, the world’s largest travel-management company.
AmexGBT saw strength in transactions from global multinational corporations — tech companies in particular, with 30% growth. Other sectors turned in double-digit growth too, including pharmaceuticals, mining, energy and utilities.
But there was a downside: Small- to medium-sized businesses offer the largest opportunity in winning new business and they showed a decline in transaction growth of 3 percentage points in the fourth and first quarters.
These smaller businesses spend $30 million or less on travel annually and mostly let their employees book wherever they want.
They may not need a travel management company like Amex GBT. What’s more, they’ve been hit hard in recent months by higher inflation and interest costs, leading to tighter travel budgets.
Amex GBT CEO Paul Abbott told analysts during the earnings call Tuesday that of the $900 billion in total transaction value in play in business travel annually, “$300 billion sits with, if you like, professional managed-travel programs, and $600 billion in unmanaged.”
The entire business travel market is worth $1.4 trillion, he said, and “SME is the biggest opportunity within that.”
The earnings call took place with some unfinished business on the agenda — the $570 million acquisition of CWT, which officials said is poised to close in the second half of 2024.
Abbott said the companies’ integration teams are “established.”
He said the acquisition would increase company revenue by one-third and it would have the potential to be a “significant” contributor to earnings in the long run. There would be $155 million in “annual run rate cost synergies,” Abbott said. Meaning layoffs and trimming other redundant operations.
American Express Global Business Travel stated that a recent survey of its top 100 customers found they expect their travel spend to rise 8% in 2024.
In the first quarter, the company narrowed its net loss to $19 million from a loss of $27 million in the year-ago period.
Revenue rose 6% in the first quarter to $610 million.
One of the brighter metrics was that free cash flow hit $24 million in the first quarter, up from minus $109 million a year earlier.
The Business Platinum Card® from American Express might come with a high annual fee, but it also has a whole lot of credit card perks.
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