American Express Global Business Travel (Amex GBT) reported spend and transaction growth among its global multinational companies has continued to outpace that of small and mid-sized companies in the year’s second quarter.
Total transactions from global multinational companies increased 7 per cent year over year in Q2, Amex GBT CEO Paul Abbott said during an earnings call on Tuesday (6 August), while transactions among SME clients increased by 1 per cent.
However, growth rates have slowed compared to Q1 2024, which saw transactions from global multinational clients increase 11 per cent year over year, while SME transactions rose 5 per cent.
The travel management company reported total transaction value overall increased 5 per cent year over year to $7.7 billion in Q2. Total revenues for the quarter, including travel and product and professional services, increased 6 per cent to $625 million, while adjusted EBITDA grew 20 per cent year over year to $127 million.
Abbott said slowdown in the second quarter was primarily driven by slower same store sales and the impact of the Olympics currently taking place in France, which Abbott said is the TMC’s second largest country in terms of transaction volume.
Transactions in France were “very strong” in Q1 but “rapidly decelerated” and ended the second quarter down 4 per cent, which resulted in a negative impact to year over year total transaction growth by 1 percentage point. However, Abbott said the TMC expects France to “bounce back” with a return to growth from September onwards.
In the second quarter the TMC saw “very solid growth” among its top five industry verticals which account for more than 60 per cent of global multinational transactions, Abbott said. These include the financial services and insurance sectors, which saw a 13 per cent increase in transactions, the 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).
Meanwhile, Q2 growth among SME clients was “relatively muted” as these customers have “tighter spending controls in the face of sustained higher interest costs and higher inflation,” Abbott said. Nevertheless, he remains “confident” that as macro-economic conditions improve, so will SME growth.
A recent survey of the TMC’s top 120 SME customers showed 82 per cent expect travel spend to grow or remain flat in the year’s second half. Amex GBT also reported $2 billion worth of new business wins from SMEs in the last 12 months, with Abbott stating this segment “remains our biggest growth opportunity”.
Abbott also highlighted the company’s “solid foundation” and “strong customer retention rate”, which reached 98 per cent among multinational clients in the last 12 months. He also cited a recent survey of Amex GBT’s global multinational customers which revealed that “our top 100 customers now expect travel spend to be up approximately 10 per cent year over year for the full-year 2024″. This marks a 2 percentage-point increase from the TMC’s previous Q1 survey.
Amex GBT’s planned acquisition of CWT, which is currently being investigated by the UK’s Competition and Markets Authority (CMA), was also addressed during the call, with the TMC now working “collaboratively” with the CMA as it carries out its phase 2 investigation, which typically takes 24 weeks, according to the TMC.
Amex GBT chief legal officer and global head of M&A Eric Bock said: “The bar is relatively low when you go from a phase one to a phase two… and [the CMA] were focused on the competitive environment, which we believe we will be able to show continues to be intense with lots of competitors. We believe the facts will play out in our favour and are very confident that we will close this in the first quarter [of 2025],” he said.
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