Business travel, once a stalwart of corporate existence, has been taxiing on the post-COVID runway.
But the strong financial results posted by American Express Global Business Travel (Amex GBT) on Tuesday (March 5) for the fourth quarter and full year ending Dec. 31 point to hopes that the sector could be cleared for takeoff — and may already even be midflight.
Amex GBT, which is operated by Global Business Travel Group — a business-to-business (B2B) software and services company for travel and expense — reported that its revenue for the fourth quarter 2023 reached $549 million, nearly doubling year over year, while adjusted EBITDA stood at $80 million. For the full year, revenue increased by 24% to $2.29 billion, with adjusted EBITDA up nearly four times to $380 million.
This performance was driven by strong demand for the company’s software and services, executives on Tuesday’s call noted.
For full-year 2024, the company is guiding to 6-9% revenue growth driven by expected stable growth in business travel and Amex GBT’s continued share gains.
As Karen Williams, Amex GBT’s chief financial officer, stated: “Our 2024 guidance demonstrates the power of our financial model to leverage stable travel demand growth to above-industry revenue growth.”
Read more: Businesses Reconsider Travel Amid Cost-Cutting and Environmental Concerns
More and more small and medium-sized enterprise (SME) customers are recognizing the value of managed travel programs, Amex GBT executives told investors.
“SME new wins for 2023 totaled $2.2 billion, a record for our business, and were up $100 million year over year. Of this, approximately 30% has come from previously unmanaged customers who are looking for the service savings and control that our solutions provide. This is 5 percentage points higher than our mix of unmanaged new wins in 2022,” said Paul Abbott, Amex GBT’s CEO.
Overall, Amex GBT reported a record total new wins of $3.5 billion in 2023, demonstrating the effectiveness of its market expansion strategies. The company boasted a customer retention rate of 96%.
On Monday (March 4), Amex GBT announced a new integration with American Express that lets small businesses issue a virtual card for their employees via Amex GBT’s Neo1 spend management platform.
Executives used Tuesday’s call to stress how the integration represents a significant step forward in offering comprehensive solutions for SMEs, combining procurement, expense management, online travel and payments into a single software solution.
“The integration of payment is really, really important because what customers can now do in Year 1 is they can simply add their eligible American Express business or corporate card account into the platform. And then they can use that to set budgets and to issue virtual payment cards to employees across the company, at the same time, setting controls and policies in the platform. So, it’s a very powerful solution for businesses that are really looking for that turnkey all-in-one spend management platform,” Abbott said.
See also: Amex Integrates Virtual Cards With Business Travel Platform
Amex GBT’s transaction growth was also impressive, with a 19% increase in full-year transactions driven by increased demand for business travel and share gains. Total transaction value (TTV) grew by 23%, fueled by strong transaction growth and an increased mix in international bookings. Hotel growth outpaced air travel, reflecting industry trends and Amex GBT’s focus on providing customers with more value and choice.
Regionally, transaction growth was 16% in the Americas, 20% in EMEA, and 29% in Asia Pacific due to a delayed recovery in the region. Amex GBT’s revenue performance was driven by its business services and travel tiers, with strong new wins and increased demand for business travel, meetings, and events from its diverse customer base.
Looking ahead to 2024, GBT anticipates 3-5% growth in the business travel space.
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