Business travel is back in a big way, according to American Express Global Business Travel. Amex GBT told company investors on a recent fourth-quarter 2022 earnings call that they expect total business travel spending to grow by 24% in 2023 to reach over a trillion dollars.

While the recovery for business travel has been lagging behind the leisure sector in the aftermath of the pandemic, the company’s latest earnings report paints a more hopeful picture for 2023.

Expectations for a strong year are supported by data from the company’s vast customer portfolio and also data from across the industry, according to the company, which also cites the Global Business Travel Association’s Q1 2023 Business Travel Outlook Poll published at the end of January, which says domestic and international bookings are currently at 67% and 54% of 2019 levels. This is up from 63% and 50% in their October survey.

According to Amex GBT:

• 78% of travel managers expect more, or a lot more trips in 2023 versus 2022.

• 86% of travel suppliers expect higher spending from corporate customers in 2023, an improvement from 80% in October.

• Finance, insurance, professional services and consulting are the sectors showing the strongest growth rates.

This expected increase in demand will be met by increased supply supporting confidence in solid industry growth this year, says Amex GBT, which notes that IATA forecasts capacity growth of 18% globally in 2023. This includes 5.5% in North America, 6.1% in Europe and 48% in Asia Pacific, largely driven by China.

Small business leading the way

Amex GBT says that small and medium sized enterprises (SME) clients “were leading recovery” and it was benefiting from an “all-time high” in win rates and customer satisfaction in this segment of the market.

The company told investors that distributed teams and hybrid work models are creating new demand for business travel, meetings, and events; and that global travel spend is expected to grow as capacity increases and existing restrictions in various regions are softened or lifted.

Increased meeting bookings also boosted hotel revenue, particularly for groups of under 50 people. Amex GBT’s meetings and events division has more than recovered, compared with 2019, and those smaller meetings now represent its fastest growing area of business, said CEO Paul Abbott.

The company signed “$2.1 billion of SME new wins value” in 2022, with a quarter of that value coming from businesses whose travel programs were previously unmanaged or handled in-house.

“Of course, our biggest growth opportunity is with SME customers,” said Abbott. “This represents a total opportunity of approximately $950 billion of travel spend. Within the SME segment, we are the No. 1 player in managed travel, but only 30% of the $950 billion opportunity is actually managed today, providing a significant growth opportunity.”