Business travel is staging a comeback after stagnating for two years following a collapse during the early days of the coronavirus pandemic, according to credit card company American Express.
Travel spending by S&P 500 clients in the month of March was “well over 50 per cent” of its level in 2019, the year before the pandemic hit, Jeff Campbell, Amex chief financial officer, told the Financial Times.
The business travel recovery stalled briefly at the beginning of this year as the Omicron virus variant surged around the US. But travel and entertainment spending — which includes flights, hotels and restaurants — rose 156 per cent in the first quarter compared to 2021 among Amex’s corporate customers. *
Last year, American Express said a full rebound in business travel could take years, but the recovery so far has been faster than expected, Campbell said.
“People are looking to get out and not only gather with their own colleagues, but they’re also looking to get out and meet with customers,” Stephen Squeri, Amex chief executive, said on a call with analysts. “People are excited to go out and see the world again, both from a business perspective and from a consumer perspective.”
To date, consumers have led the resurgence in travel spending, while bigger companies have generally been more cautious. US consumer spending on travel across Amex’s network reached 120 per cent of 2019 levels. Travel spending for large global corporations during the same period, however, was just 38 per cent of pre-pandemic volume.
Overall spending volumes surged 30 per cent across Amex’s network, and total revenue jumped 29 per cent to $11.7bn, ahead of Wall Street expectations. Business spending would likely become a larger tailwind for the company as non-travel consumer spending moderates from the rush of spending unleashed last year as the economy began to reopen, executives said.
Amex reaffirmed its bullish long-term outlook on Friday as it reported first-quarter earnings, and brushed off concerns that the economy was heading into a recession.
Pent-up demand and an increase in business clients using charge cards to wine and dine clients and book business-class seats were larger drivers of spending growth than inflation, Campbell said.
“There’s certainly lots of uncertainty in the world, but when you look at everything we see in our actual results, you just can’t really see any sign of weakness,” he said.
This story has been amended to reflect US consumer spending on travel across Amex’s network reached 120 per cent of 2019 levels.