American Express Global Business Travel says its focus on small businesses was a wise bet.
The company released quarterly earnings Tuesday (Nov. 7) showing transactions in its small and medium-sized enterprise (SME) category growing 10% from the same quarter in 2022.
“Our results continue to be very encouraging,” CEO Paul Abbott told analysts during an earnings call. “We reported double-digit SME transaction growth and strong SME new wins value of $2 2 billion over the last 12 months, including a significant contribution from previously unmanaged customers.”
Earlier this year, American Express Global Business Travel (AmEx GBT) released figures showing that spending on business travel by SMEs had recovered to 80% of pre-pandemic levels, while that by global and multinational firms was at 61%.
In Tuesday’s results, transactions by multinational firms were behind those of SMEs, up 7% for the quarter.
“Our strategy and our focus on SME growth is clearly paying off,” Abbott said. These customers, he said, “represent the largest growth opportunity with the fastest growth and the highest margins in the industry.”
Meanwhile, the company reported that 77% of its transactions are coming through digital channels, helping it reduce costs, with its share of digital transactions up 12 percentage points over the last four years.
User growth on the Amex GBT mobile app has nearly doubled, with mobile interactions up by more than 140% and chat volumes jumping by nearly 50%.
“And this is important because it also unlocks a significant opportunity for us through AI-powered solutions for both improving the productivity of our people and improving the customer experience,” Abbott said.
The company’s earnings report comes as a number of players in the travel sector, including airlines and third-party firms, are targeting SMEs — also known as SMBs, or small and medium-sized businesses — with digital and artificial intelligence (AI) solutions to bring up numbers.
“While that won’t change the reality that global business travel and events costs are expected to keep climbing through the remainder of 2023 and into 2024, it may help provide some cushion,” PYMNTS wrote in August. “After all, SMB spend represents a strong growth driver within the travel segment, no matter the degree of uncertainty in the macroeconomic environment.”
Among the companies trying to attract small businesses is on-demand private aviation firm Wheels Up, which last month launched its Up for Business membership for SMBs.
“Historically, smaller- to medium-sized businesses were forced to adapt to either a product that was designed for individuals or a solution that was built for large corporations,” Robert Bourrier, executive vice president, global sales, said in a statement at the time. “We see an opportunity to deliver a tailored product to members rather than a one-size-fits all offering, while capturing the operational and financial benefits of a balanced fleet utilization throughout the week.”
For all PYMNTS B2B coverage, subscribe to the daily B2B Newsletter.