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While the recovery for business travel has been lagging behind the leisure sector in the aftermath of the pandemic, American Express Global Business Travel’s earnings report paints a more hopeful picture for 2023.
“We are excited about the year ahead and very confident in our position and our outlook for growth in 2023,” said CEO Paul Abbott in a call with analysts to discuss the company’s fourth quarter and full year 2022 financial results.
Amex GBT is looking to projections from the Global Business Travel Association that business travel spending will increase 24% this year, pushing it over $1 trillion.
“There are several tailwinds that set us up for growth in 2023,” Abbott says. “First of all, the business travel recovery continues, and the outlook remains positive with our customers. Industry experts predict business travel spend will continue to grow, and capacity will continue to increase, all supporting continued growth in 2023.”
In addition, he says, the push toward distributed teams and hybrid work is driving more demand for travel meetings and events, with anticipated improvements in airline capacity supporting the increased demand.
“Importantly, these tailwinds and our expectations for the year ahead are supported by data from customers and data from suppliers and data from across the industry,” Abbott says. “All in all, I think this results in expectations for strong revenue and earnings growth in 2023.”
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The year just finished wasn’t bad, either. Revenue for the full year 2022 reached $1.85 billion, a 143% increase over 2021. Over the last three months of the year, revenue stood at $527 million, an increase of 84% from the same period the previous year.
Adjusted EBITDA totaled $43 million in Q4 and $103 million for the year.
Sales and marketing expenses for the full year were $337 million, up two-thirds from the previous year.
“The fourth quarter marks a strong finish to 2022,” Abbott says. “Record new wins, high customer retention and strong momentum in the [small and mid-size enterprise] segment delivered results ahead of our guidance for the year. With continued strong revenue growth and the momentum of three straight quarters of positive adjusted EBITDA, we are well positioned for continued strong growth in revenue, profitability and cash flow as we look ahead to 2023 and beyond.”
The growth and strong forecast come even as the company is incorporating measures for the future.
Amex GBT started working last year with Traxo, a specialist in corporate travel data, to automatically capture data from bookings made out of the travel management company’s channels. It uses Traxo’s Filter technology to capture the data and bring it back into its own systems.
In January the company announced it’s working with climate tech specialist Chooose to integrate carbon emissions calculations across its booking and reporting tools to build up consistent data and develop an architecture for carbon compensation.
Also in January, Amex GBT announced a restructuring to a “global, segment-driven model,” with operations divided between segments focusing on global and multinational customers and on small and medium-sized enterprises, a spokesperson for the travel management company says.
The company also is teaming up with energy giant Shell and professional services company Accenture to create a new platform for purchasing sustainable aviation fuel. The three companies have launched Avelia, which is a “book-and-claim” platform for sourcing SAF, which reduces carbon emissions from flights compared with traditional kerosene jet fuel.
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