Yahoo Finance Amex GBT Shifts Focus to Hotels and Meetings
American Express Global Business Travel is finding that hotel bookings are recovering faster than flights when it comes to business trip bookings.
It’s not by chance. The world’s biggest corporate travel agency has made hotels a “strategic priority” as it leverages the special relationship it has with Expedia.
Amex GBT bought corporate travel platform Egencia from Expedia Group a couple of years ago, and as part of the deal gained access to its vast hotel content.
For the three months to Dec. 31, 2022, the recovery of hotel transactions was at 80 percent, 14 percentage points above air, Amex GBT revealed in its full-year results on Thursday.
“One of the key elements is that it has been a strategic priority to increase content and attachment rates, bringing in all the content from Expedia,” said CEO Paul Abbott during an earnings call.
The hotel content is then displayed in its Neo and Egencia corporate booking tools. A “hotel attachment” is when a hotel booking is attached to an airline or rail reservation.
Increased meeting bookings also boosted hotel revenue, particularly for groups of under 50 people. Amex GBT’s meetings and events division is more than recovered, compared with 2019, Abbott added, and those smaller meetings now represent its fastest growing area of business.
Amex GBT’s sales of flights for the quarter seem to have flatlined at about 66 percent of 2019 levels, the same amount as in the third quarter of 2022. It was 64 percent in the second quarter.
Prioritizing hotel content could pay off in 2023 too, especially as American Airlines readies to pull 40 percent of its airfares out of traditional retail channels in April.
Rail travel in Europe was also gaining ground.
Overall, Abbott said the travel agency was outpacing the broader market. During last year’s fourth quarter Amex GBT’s revenue had recovered to 75 percent compared to the 2019 fourth quarter. He cited the Global Business Travel Association’s recent Outlook Poll, which placed domestic travel booking levels at around two-thirds of 2019 levels, and international business travel at 54 percent.
For the 12 months to Dec. 31, 2022, Amex GBT made a net loss of $229 million. Its revenue was $1.85 billion, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $103 million.
In the fourth quarter it made a net loss of $63 million. Revenue was $527 million and adjusted EBITDA was $43 million.
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