American Express Reports Most Spending Categories 'Fully Recovered,' Save Large Corporate T&E
Spending categories are poised for more stable growth in 2023, with the exception of T&E, which will be an exception in the first quarter due to the comparisons to omicron-impacted first quarter of 2022.
Kass
American Express reported "particularly strong" travel and entertaining spending among all its customer types in the fourth quarter, CFO Jeff Campbell said in an earnings call on Friday.
Total T&E spending on American Express products in the fourth quarter was $25 billion, up 44 percent year over year and down 9 percent compared with 2019. The total was about flat with the previous quarter and a percentage point better in terms of recovery.
T&E spending by large U.S. and global corporate customers was up 86 percent year over year but remained at two-thirds of pre-pandemic levels in the quarter. T&E spending by small and midsized Amex customers was up 30 percent year over year and 14 percent higher than levels in the fourth quarter of 2019.
International customers' T&E spending on Amex products, which includes consumer as well as business spending, totaled $21 billion in the quarter, up 53 percent year over year and 7 percent above 2019 levels.
In terms of total T&E spending by category, only spending on airlines was below 2019 levels in the fourth quarter, down 6 percent but up 67 percent year over year. Spending on lodging was up 35 percent year over year and up 3 percent compared with 2019, and restaurant spending was up 24 percent year over year and 37 percent compared with 2019.
"On a dollar basis, most of our spending categories have fully recovered, so I would expect more stable growth rates this year," Campbell said, noting T&E would likely be an exception in the first quarter due to the lingering impact of the omicron Covid-19 variant in the first quarter of 2022.
Amex reported total revenues of $14.2 billion in the fourth quarter, up 17 percent year over year, and both increased spending and higher net interest income drove the growth. The company's net income for the quarter was $1.6 billion, down from $1.7 billion in the fourth quarter of 2021.
