Travel played a key role in Amex’s strong Q2 earnings

data: American Express’ Billing business grew 30% YoY (YoY) in the second quarter, for every View its earnings. This is slowing down from Second quarter of 2021 an increase of 51% over last yearwhich was fueled by the release of spending after the closure.

Here’s a closer look at Amex’s billing business segment:

  • Travel and Leisure (T&E) spending rose 84% year over year Compared to the 340% increase last year, which increased significantly due to post-lockdown conditions.
  • Goods and Services (G&S) is up 18% year over year. G&S spending in the second quarter of 2021 increased 31% thanks to improved consumer financial metrics compared to the previous year.

How did we get here: Four factors may have contributed to Amex’s strong Q2 performance.

  1. Amex’s position in the market. Despite saying that inflation was a “modest contributor” to the quarter’s volume growth, Amex didn’t notice any significant signs of tension among its customers, CEO Steve Squire said of the company. earnings call. Amex’s strong position in the premium and premium card space indicates that it has a large segment of affluent cardholders who may be less vulnerable to inflation than lower income consumers.
  2. Tailwind for T&E recovery. A strong jump in travel spending during the last quarter helped support Amex’s billing business: Spending on airlines increased by 148% annually, while restaurants and accommodations grew 48% and 90% year-on-year, respectively. Corporate travel, which has been slow to recover, also increased in the second quarter. Squire noted that spending on T&E exceeded pre-pandemic levels for the first time in April.
  3. Acquisitions of younger cardholders. Squire said Amex is working to capture business from Gen Zers and millennials, who made up a large portion of Amex’s customer base and were the fastest growing age group. These customers – who have a The combined purchasing power of nearly 3 trillion dollars in 2020, for every YPulse – Acquired 75% of new US consumer platinum and gold cardholders in the second quarter. US consumer platinum and gold card acquisitions reached record levels this quarter.
  4. Investments in digital innovations. Amex invests more in digital solutions. Recently, he partners with source processor i2c So financial companies and other companies that work with i2c can release cards on the Amex network. It also runs The lesson encoder cardAmex’s first major foray into cryptocurrency. These connections and investments may have helped Amex increase spending on its network.

What’s Next? Amex card renewals can help capitalize on consumer spending trends.

AMEX updated Bonuses on its Blue Cash Everyday Card earlier this month with higher cashback rewards for online shopping and gas stations and new rewards for streaming services. and here added Several new T&E franchises for the Marriott Bonvoy business card last week. Rewards updates from Amex can help boost customer loyalty and gain new cardholders: 44% of US consumers cited rewards as the main reason for applying for a new credit card during the pandemic.And the for every 2022 Lending Tree Survey.

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