Continued strong demand from small and midsize clients helped push total third-quarter travel and entertainment spending on American Express cards up 57 percent year over year as large corporate clients showed a “steady” recovery in business travel, American Express reported.
Total T&E spending on Amex products among U.S. clients was about $25 billion in the third quarter, up 71 percent year over year and down 10 percent compared with the pre-pandemic third quarter of 2019, according to Amex. Total spending among U.S. SME clients—which also includes spending for goods and services, which makes up about 80 percent of total spending—was up 17 percent year over year and 32 percent above pre-pandemic levels. U.S. large and global client spending was up 43 percent year over year but still 13 percent below 2019 levels for the quarter.
In the previous quarter, total large and global corporate T&E spending was at 60 percent of pre-pandemic levels.
“These customers continued their steady travel recovery this quarter,” American Express CFO Jeff Campbell said in an earnings call. “We do continue to expect that this group will fully recover over time.”
In recent months, American Express CEO Stephen Squeri said in the call that the company reorganized to bring its international consumer, small business and large corporate management teams under a single leader: International Card Services president Rafa Marquez. As such, Amex changed up its reporting for the quarter, reporting all international card services billed business in its own category.
Total T&E spending on Amex cards by international customers—which includes consumer as well as business travel—was up 86 percent year over year in the third quarter and was above pre-pandemic levels adjusted for currency exchange rates, Squeri said. That was a first for the segment, he said.
Total third-quarter spending among international business clients, including both SME and large clients, was up 43 percent year over year, Amex reported.
“As we said earlier this year, we expected the recovery in travel spending to be a tailwind for us,” Squeri said in the call, “but the strength of the rebound has exceeded our expectations throughout the year.”
Among T&E spending categories, total T&E spending among Amex customers on airlines was up 118 percent year over year in the third quarter, though spending was still 7 percent below pre-pandemic levels. Lodging spending was up 49 percent year over year and flat with 2019 levels, while restaurant spending was up 32 percent year over year and up 37 percent over 2019 levels. Squeri noted Amex was seeing “increased customer engagement” with its benefits such as its Resy dining platform, which has seen its users triple since 2019, he said.
Squeri added that Amex is watching the economy carefully and has “plans in place for a pivot” should there be a drastic downturn, but as of now, “we see no changes in the spending behaviors of our customers.”
American Express reported net income of $1.88 billion for the third quarter, up 3 percent year over year.
American Express Q2 results