Travel and entertainment spending by American Express corporate customers increased 8 percent year over year to $27 billion in the second quarter, although overall corporate spending showed only slight growth compared with consumer spending in the quarter.
The total T&E spending repeated the $1 billion quarter-over-quarter growth seen in the first quarter, following three quarters that had remained steady at $25 billion. Overall corporate spending, which includes T&E as well as goods and services, was up 2 percent year over year for both large and global U.S. corporate and U.S. small and medium-sized business customers.
That compares with a 34 percent increase for large and global accounts and 6 percent increase for SME accounts in the first quarter, but the previous quarter also “lapped the impact” of the omicron Covid-19 variant the previous year, which elevated growth rates, Amex CFO Jeff Campbell said in an earnings call. “We are now seeing the more stable rates we expect are more representative of the kind of growth rates we will see in the balance of the year,” said Campbell, who is retiring from his position next month.
Large corporate business, which is about 5 percent of Amex’s overall business, is “crawling its way back” as companies continue to work to get employees back into the office, Amex chairman and CEO Stephen Squeri said in the earnings call.
“What you’re seeing a little bit less of is those one-stop trips, that quick hop to London to meet with one client or that quick sort of run across the country to have an internal meeting,” Squeri said. “I think that will continue to come back. We continue to be aggressive at retaining those customers and aggressive acquiring new customers, but I think that’s going to be slower.”
SME growth overall has seen an “industry-wide slowdown,” he added.
International SME and large corporate spending, inclusive of T&E, was up 19 percent year over year, the largest growth rate of any corporate or consumer sector at Amex. Total T&E spending by international clients—which is about two-thirds consumer and one-third business—increased 23 percent year over year to $25 billion.
The growth indicates “international has come back even a little quicker than we had thought within our three-year horizon,” Squeri said.
U.S. consumer T&E spending in the Amex network increased 15 percent year over year to $48 billion in the quarter and is “very, very strong,” Squeri said. “Travel bookings more than one month out are higher than they’ve been pre-pandemic.”
Total network volume for Amex increased 8 percent year over year to $426.6 billion, which was an all-time high for the company. Amex reported net income of $2.17 billion for the quarter, up 11 percent year over year.
Amex Q1 results