Business travel, once a pillar of corporate survival, has taken off on the runway since COVID-19.
But the strong one is settlement of accounts American Express Global Business Travel (AmEx GBT) posted Tuesday (March 5) report for the fourth quarter and full year ended December 31, suggesting the sector could have room to take off. There is hope that there is a possibility that the plane is in flight, and that it may even be already in flight.
Amex GBT, operated by Global Business Travel Group, a travel and expense business-to-business (B2B) software and services company, reported fourth-quarter 2023 revenue of $549 million, nearly double year-over-year. I reported that it happened. Adjusted EBITDA was $80 million. For the full year, sales increased 24% to $2.29 billion, and adjusted EBITDA nearly quadrupled to $380 million.
On Tuesday's conference call, executives noted that the results were driven by strong demand for the company's software and services.
For the full year 2024, the company is aiming for 6% to 9% revenue growth, driven by the expected steady growth in business travel and continued growth in Amex GBT market share.
Karen Williams, Chief Financial Officer of AmEx GBT, said: “Our 2024 guidance demonstrates the power of our financial model to leverage stable travel demand growth into industry-beating revenue growth.”
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Investing in small businesses
AmEx GBT executives told investors that more small and medium-sized enterprises (SMEs) customers are recognizing the value of managed travel programs.
“SMB new acquisitions totaled $2.2 billion in 2023, a record for our business and an increase of $100 million year-over-year. Approximately 30% of this was driven by service savings provided by our solutions. This is 5 percentage points higher than our unmanaged new acquisitions in 2022,” said Paul Abbott, CEO of Amex GBT. says.
Overall, AmEx GBT reported record total new acquisitions of $3.5 billion in 2023, demonstrating the effectiveness of its market expansion strategy. The company boasted a 96% customer retention rate.
Monday (March 4th), Amex GBT announced A new integration with American Express will allow small businesses to issue virtual cards to their employees through Amex GBT's Neo1 spend management platform.
Executives said in a conference call Tuesday that the integration is a significant step forward in providing a comprehensive solution for small and medium-sized businesses by unifying procurement, expense management, online travel and payments into a single software solution. He emphasized that.
“Payment integration is critical because all a customer can do in year one is add an eligible American Express business or corporate card account to the platform. And use that to set a budget. You can issue virtual payment cards to employees across your company and set controls and policies on the platform at the same time. Therefore, this is a very powerful solution for businesses that are truly looking for a turnkey, all-in-one spend management platform. ,” Abbott said.
See also: Amex integrates virtual card with business travel platform
Amex GBT trading growth was also impressive, with full-year trading up 19% due to increased business travel demand and rising stock prices. Total transaction value (TTV) increased by 23% due to strong transaction growth and increased international bookings. Hotel growth has outpaced air travel and reflects industry trends and AmEx GBT's focus on providing customers with more value and choice.
Regionally, trade growth was 16% in the Americas, 20% in EMEA and 29% in Asia Pacific due to slower regional recovery. Amex GBT's revenue performance was driven by the business services and travel segment, which saw strong new acquisitions and increased demand for business travel, meetings and events from a diverse customer base.
Looking ahead to 2024, GBT expects growth of 3-5% in the business travel sector.
