Amex Global Business Travel is using technology from its Egencia acquisition to capitalize on the small business travel boom.
As business travel struggles in its post-pandemic recovery, Amex Global Business Travel (GBT) is using its acquisition of the Egencia corporate-travel management platform to focus on securing business from a key growth market: small- and medium-sized businesses.
Amex GBT, which went public just more than a year ago via a special purpose acquisition company (SPAC), acquired Egencia from Expedia in 2021.
Since then, Amex GBT has been investing in Egencia’s mobile app, chat capability and an AI-powered feature that gives companies recommendations for its travel approval policies. One aim of these technologies is to lessen the hassle that small businesses experience when transitioning to a managed travel program.
“[Small- and medium-sized] businesses, including those that are transitioning from unmanaged to managed travel programs, need quick and easy onboarding, and access to a travel marketplace rich with value for their travelers,” Manuel Brachet, Egencia’s senior vice president, commercial, told Skift in an email.
Amex GBT has seen more than 60% of its new, signed business in the past year come from small- and medium-sized enterprises, Brachet said. An estimated 30% of that came from clients without existing managed travel programs. The company’s overall transactions in the first quarter from these smaller businesses were about 88% of 2019 levels.
Small Business Benefits
One company that says it has benefitted from Egencia’s tools is Community Solutions, a New York-based nonprofit working to end homelessness with a growing staff of between 100 and 150 employees across the United States. Employees generally travel for on-site community visits, as well as periodic all-staff gatherings.
The company tells Skift that Egencia helped it save $35,330 in 2022, the same year it restarted corporate travel and implemented the platform.
Before using Egencia, Community Solutions allowed employees to book their own travel with individual corporate credit cards. But managing so many employees on the move quickly became cumbersome, said Heather Edwards, Community Solutions’ senior finance coordinator.
“It was so complicated because you just have an Excel spreadsheet where you were trying to keep up with all this when you were doing credit card reconciliations,” Edwards said. “But it’s pretty impossible, to be quite honest, to manage that many employees’ credit cards and to be in charge of all that information as well.”
A portion of the savings — $13,870 — came from tracking and using airline credits that otherwise may have gone to waste. These include exchanged airline tickets, airline credits and refunded tickets. Edwards said that is one of the biggest benefits of using Egencia, as before she relied on an Excel spreadsheet to track those tickets based on chats with customers.
The company also attributed $9,880 in hotel savings to Egencia’s special rates and negotiated company rates, and $9,780 in savings from negotiated airline agreements.
Another benefit of Egencia is that it tracks how many employees are traveling at any given time, and generates reports managers can use each week to tell who is on the road. Egencia also allowed the company to implement an approval process for supervisors to sign off on travel decisions.
Synergies Nearly Realized
In May, Amex GBT said it plans to deliver about $60 million in synergies this year related to its Egencia acquisition.
“Based on actions we’ve already completed so far, we’ve achieved approximately 80% of the expected synergies from Egencia at the full recovery level,” CEO Paul Abbott said during a conference call after releasing first-quarter results.
If it delivers on this year’s goal, Amex GBT would be close to realizing nearly all of the $109 million in total Egencia synergies it was expecting. The company already saw $45 million in Egencia synergies in 2022.
Deloitte projects that a full recovery of business travel could happen in late 2024 or early 2025.
Amex GBT’s focus on hotels and meetings — segments recovering more quickly than air travel — appears to be helping. In the first quarter, Egencia’s first-quarter hotel transactions were up 111% over 2019 levels.
Amex GBT’s transactions grew 61% from a year ago and reached 76% of 2019 levels. The company also saw record transactions in the first quarter on its Neo travel-expense platform.
The company noted that 76% of its transactions are coming via digital channels, and Abbott said the company wants to further increase the share coming through Neo and Egencia to improve profit margins.
First-quarter revenues increased 65% and the company’s net loss narrowed to $27 million, from $91 million.
Amex GBT’s Deputy Chief Financial Officer Karen Williams said the company expects the second quarter to be a “pivotal turning point” because it plans for its free cash flow to break even.
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Photo credit: Business person doing business travel. Source: Adobe. Liubomir / Adobe