American Express Global Business Travel benefited from “strong” growth from global and multinational clients while the increase in transactions by SMEs remained “muted” during the third quarter.
The company, which is ranked as the largest TMC in Europe, saw its total transaction value (TTV) rise by 9 per cent year-on-year to $7.8 billion in Q3, while revenue increased by 5 per cent to $597 million over the same period, driven by “solid growth in transactions, TTV and increased demand for our products and professional services”.
During an earnings call on Tuesday (5 November), Amex GBT’s CEO Paul Abbot said that TTV growth was outpacing the increase in transactions due to higher average ticket prices and hotel room rates.
Abbott also highlighted the “strong” growth from global and multinational (GMN) clients, which saw an 8 per cent increase in transactions in the third quarter, compared with the SME sector where growth was just 2 per cent year-on-year.
Pharma and healthcare was the GMN sector to see the highest growth in transactions at 18 per cent, compared with Q3 of 2023, followed by automotive (up by 13 per cent year-on-year), and financial services and insurance (also up 13 per cent).
“We saw very solid growth across almost all of our top industry verticals – technology growth (+5 per cent year-on-year) returned to more normal levels,” said Abbott.
“SME transaction growth remained muted at 2 per cent growth but improved modestly versus the 1 per cent growth we recorded last quarter. SME customers have tightened spending controls in the face of sustained higher prices and higher interest rates.”
Transaction growth in the EMEA region was just 2 per cent year-on-year - well behind the Americas, which saw a 6 per cent increase in the quarter, and Asia Pacific, where there was an 11 per cent rise.
Abbott attributed the “softer” growth in Europe to being “impacted by the Olympics in France” during the quarter.
Despite the recent slowing in the growth of SME bookings, Abbott said it remained the “biggest growth opportunity” for Amex GBT, with an estimated 70 per cent of these organisations currently not having a managed travel programme.
He added that he hoped the gradual reduction of interest rates in the Eurozone, UK and US would help to “improve confidence” with SMEs going into 2025.
Amex GBT also highlighted that it had won new business worth a total of $3 billion in the past 12 months up to 30 September, including $2.1 billion from SMEs. The company added that it achieved a customer retention rate of 97 per cent over the same period.
On the subject of Amex GBT’s proposed $570 million acquisition of CWT, Abbot said that the company was continuing to “work through the regulatory approval processes and continues to expect the transaction to close in the first quarter of 2025”.
The acquisition is currently undergoing a “phase 2” investigation by the UK’s Competition & Markets Authority, with that process expected to be concluded by 26 January 2025.
Amex GBT’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) was up by 23 per cent year-on-year to $118 million during the third quarter.
The company also announced that it had secured approval from its board of directors for a buyback of its shares from investors of up to $300 million. Amex GBT has already completed a private share buyback worth $55 million in September.