The agency’s third-quarter results generally point in the right direction, as the public listing and acquisitions bed in. But the tech sector’s widespread layoffs, and that impact on the number of business trips that will be taken in the future, just can’t be ignored.
American Express Global Business Travel continues to benefit from the ongoing rebound of business trips. In particular the reopening of countries in Asia Pacific, barring China of course, bodes well for the world’s biggest travel agency.
In fact it’s the “highest recovered region,” primarily driven by the recovery in Australia and India, said CEO Paul Abbott during an earning’s call on Thursday.
But the recent spate of tech company layoffs must have been on his mind. In the past two weeks Twitter and Meta, the parent company of Facebook and Whatsapp, have announced widespread redundancies.
It’s making forecasting difficult, with macroeconomic headwind “difficult to size right now” it said in a separate report Thursday.
“Obviously, we recognize that the macroeconomic outlook for 2023 has become more challenging over the last few months,” Abbott said. “And frankly, it’s very difficult with the level of uncertainty that exists to predict the exact impact that this may have on business travel demand in 2023.”
The newly publicly traded corporate travel agency reported a net loss of $73 million for its third quarter, covering the three months to September 30, 2022. That’s down on the $2 million loss in the previous quarter. However, revenue continues to grow and increased 147 percent to $488 million compared to the same period in 2021, and marginally up from the $486 million in the last quarter.
Abbott also said he continued to see the upside in hybrid work, with distributed teams creating new business travel demand as companies bring their people together for training, motivation and collaboration.
The company also predicts improving airline capacity will help it grow next year, and support any increased demand.
And it remains confident it can win over smaller businesses that previously only used online travel agencies, thanks in part to its large inventory. Of its $4.1 billion of total “new wins value” over the past 12 months, $2.5 billion came from small and medium-size enterprises. Of that number, half had never used a corporate travel agency on a managed travel basis before.
Its “marketplace” certainly expanded following its acquisition of Egencia last year, which locked it into a supplier partnership with previous owner Expedia.
This may prove to be its biggest asset going into the uncertainty that awaits it in 2023.
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Photo credit: Paul Abbott, CEO of American Express Global Business Travel, speaking at the Global Business Travel Association’s inaugural Sustainability Summit, held in Brussels on Nov. 8. Kit Fanner / On Location Events