Amex GBT Stays Patient on China to Recoup Missing Revenue

American Express Global Business Travel is banking on a “steady and modest” recovery in the second half of the year, in particular from eventual trips to and from what has been a frustratingly locked-down China.

In June, its corporate travel transactions had only returned to 76 percent on the same period in 2019 — that was up 14 percentage points on March 2022.

The climb back was revealed in its second-quarter results on Thursday, which saw a net loss of $2 million for the three months to June 30, 2022. That was off revenue of $486 million, which was up 217 percent on the same period last year.

The company also edged its 2022 full-year guidance upwards — again — to $1.8 billion to $1.85 billion in revenue, up from the $1.75 billion last predicted in May.

CEO Paul Abbott is bullish, particularly after picking up a new customer, JP Morgan, on the books from the third quarter. The contract value of new wins over the past 12 months now stands at $4.2 billion, according to Abbott. That amount equates to how much those companies spent on travel during 2019, which is likely to be less this year.

There are also high hopes for China’s reopening.

“We believe the recovery is going to continue, there’s momentum in key markets,” said Abbott. “China used to represent 5 percent of sales for international travel. That market is still potentially at zero today. When it opens up, that’s 5 percent. That’s a continued tailwind,” he said during an earnings call Thursday.

Meanwhile, he believes airline and airport operational issues are “starting to stabilize.”

Martine Gerow. group chief financial officer, added she felt the agency was well hedged against inflation, which could drive employee salaries up. “Inflation will have an impact on ticket prices, so additional revenue,” she said, adding there was also revenue from Amex GBT’s management fees. Last month, Amex GBT opened up its Global Business Consulting services to Egencia’s 9,000 customers.

This was the first public earnings call for Amex GBT, which listed as a public company in the second quarter.