Amex GBT sees travel recovery reach ‘pivotal moment’

American Express Global Business Travel has seen transactions recover to 72 per cent of 2019 levels during the final three weeks of April in another sign of the “strong momentum” now driving the return of corporate travel.

The travel management company, which is due to start trading on the New York Stock Exchange on or around 31 May, released its financial results for the first quarter of 2022 on Tuesday (17 May) when it revealed a 179 per cent year-on-year rise in revenue to $350 million. 

Although the company still recorded a net loss of $91 million for the quarter, compared with a loss of $114 million for the same period in 2021.

Paul Abbott, Amex GBT’s CEO, said they have reached “a pivotal moment in the business travel recovery”, which was being fuelled by companies returning to travel and the continued removal of Covid-related travel restrictions.

SMEs (small and mid-sized enterprises) are still leading the return to travel with their transactions reaching 80 per cent of 2019 levels in April. 

“Smaller companies have generally been more agile and returned to travel more quickly. However, we are beginning to see a change and larger companies really accelerate. In April, global multinational recovery increased eight points versus the end of March,” said Abbott.

He added that the gap between the recovery of domestic business travel and international trips was also closing as border restrictions have been lifted.

“Now for the first time, as of that last three-week period in April, international recovery is actually at the same level as domestic recovery,” explained Abbott.

“We believe the momentum will continue to accelerate as more businesses continue to reopen offices and the additional Covid-19 related restrictions are removed.

“It’s very clear that customers definitely recognise the value of in-person meetings to grow their business, to strengthen relationships, to motivate and engage teams, to drive creativity and innovation.”

Abbott said that the move towards more flexible working would also increase the demand for business travel with these “distributed teams” having to come together to “collaborate, innovate, motivate and learn”.

“We are seeing this dynamic play out in our meetings and events business, where demand for smaller meetings has been particularly strong,” he added.

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Emirates cuts loss to $1.1bn as recovery ‘picks up pace’

Emirates has cut its annual loss by 80 per cent to $1.1 billion as the Dubai-based airline added capacity and reinstated more flights.

The airline is now serving more than 140 destinations as Emirates rebuilds its network following the Covid-19 pandemic. This includes flying its flagship A380 superjumbo aircraft to 29 destinations.

Emirates’ revenue rose by 91 per cent to $16.1 billion during the financial year up to 31 March 2022 compared with the previous year. Operating costs also increased by 30 per cent to $3.8 billion year-on-year as its fuel bill doubled due to the expansion in capacity and a 75 per cent rise in the average fuel price.

During this financial year, Emirates also received its final five A380 aircraft, featuring its first premium economy cabin, with these seats due to go on sale next month.

Emirates’ parent company Emirates Group, which also includes ground handler and tour operator dnata, has cut its losses by 83 per cent from $6 billion to $1 billion during the year, with revenue going up by 86 per cent to $18.1 billion thanks to higher travel demand.

Ahmed bin Saeed Al Maktoum, CEO of Emirates Airline and Group, said: “This year, we focused on restoring our operations quickly and safely wherever pandemic-related restrictions eased across our markets. 

“Business recovery picked up pace particularly in the second half of the year. Robust customer demand drove a huge improvement in our financial performance compared to our unprecedented losses of last year and we built up our strong cash balance.

“2021-22 was also a significant year as the UAE (United Arab Emirates) marked its 50th anniversary and hosted the world at Expo 2020 Dubai which generated increased global engagement and visitation to the UAE.”

He added that the plan was to “build back better and stronger” in the coming year when the group expects to return to profitability.

“We are working hard to hit our targets, while keeping a close watch on headwinds such as high fuel prices, inflation, new Covid-19 variants, and political and economic uncertainty,” he said.

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Travel Industry Expected to Make Full Recovery by 2025

The global travel industry is expected to make a full recovery by 2025, according to new research from Global Data.

The study found that international departures will reach 68 percent of their pre-COVID-19 levels globally in 2022 and are expected to improve to 82 percent in 2023 and 97 percent in 2024. By 2025, travel is expected to reach 101 percent of 2019 levels with international departures projected to reach 1.5 billion.


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The outlook for North America follows these trends.

“International travel from North America had shown improvement in 2021 as international departures grew by 15 percent year-on-year. The U.S. rose to become the world’s largest outbound travel market in 2021,” said Hannah Free, travel and tourism analyst at GlobalData. “In 2022, outbound departures from North America are projected to reach 69 percent of 2019 levels, before making a full recovery by 2024, at 102 percent of 2019 levels, ahead of other regions.”

Europe’s recovery matches that of North America.

“International departures from European countries are expected to reach 69 percent of 2019 figures in 2022,” said Free. “As travel confidence rebuilds, the intra-European market is expected to benefit, driven by preferences for short-haul travel.”

Busy airport terminal.
Busy airport terminal. (photo via iStock/Getty Images E+/Terraxplorer)

A travel industry recovery is not a guarantee, noted Free.

“Travel recovery must contend with inflation, rising costs of living, and the war in Ukraine,” she said. “By 2025, international departures are projected to be 98 percent of 2019 levels. Geographically, the war has not spread beyond Ukrainian borders. However, Russia was the world’s fifth largest outbound travel market in 2019, while Ukraine was the 12th. Going forward, limited outbound travel from these countries will hinder Europe’s overall tourism recovery.”

It is projected that the Asia-Pacific region will lag behind Europe and North America. It’s expected that outbound departures from the region will only reach 67 percent of 2019 levels in 2022 due to slower removal of travel restrictions in the region, especially in China, which was the region’s largest outbound travel market.

“While global international travel is set to recover to pre-pandemic levels by 2025, tourism demand may look quite different,” said Free. “From two years of very limited travel, several long-term shifts and short-term trends have emerged. Consumers are now more likely to pursue authentic experiences, demand personalized travel offerings, blend business and leisure travel, and be more conscious of their overall environmental impact. There is still a long way to go to reach a normal situation. However, a potential full recovery by 2025 at the latest gives good reason for the travel and tourism industry to be optimistic for the future.”

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Data Shows Impact of US Pre-Departure Testing Travel Recovery

The U.S. Travel Association continues to call on the government to eliminate pre-departure testing for travelers to the United States.

The association is backing up its request with solid data that shows how this testing requirement is deterring travelers and preventing the recovery of the travel industry.


The survey, conducted by Morning Consult, polled vaccinated international travelers in France, Germany, the United Kingdom, South Korea, Japan and India.

Nearly half of respondents (47 percent) who are unlikely to travel abroad in the next 12 months cited pre-departure testing requirements as a reason they would not visit the U.S.

More than half of international travelers (54 percent) said the added uncertainty of potentially having to cancel a trip due to U.S. pre-departure testing requirements would have a big impact on their likelihood to visit the U.S.

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Additionally, a large majority of adults surveyed (71 percent) agreed they prioritize traveling to destinations without cumbersome entry requirements, including 29 percent who strongly agree.

There is still time, according to the U.S. Travel Association, to save the summer travel season.

The survey found that Forty-six percent of international travelers would be more likely to visit the United States if pre-departure testing requirements for vaccinated adults were lifted.

Even at this point in the summer travel planning season, an increase of just 20 percent more visitors this summer than we are otherwise expecting, it would mean an additional half a million visitors each month and $2 billion in valuable U.S. travel exports. That spending could support approximately 40,000 U.S. jobs.

“Before the pandemic, travel was the second-largest U.S. industry export and generated a positive trade balance of $53 billion,” said U.S. Travel Association President and CEO Roger Dow. “Inbound travel is critical to reducing the overall trade deficit, but the pre-departure testing requirement remains an unnecessary hurdle to regaining visitors and competing for global tourism dollars.

“While other countries with similar cases, vaccination and hospital rates have removed their testing requirements and have begun rebuilding their travel economies, the U.S. is at a competitive disadvantage and risks a prolonged period of recovery,” Dow added.

The U.S. Travel Association pointed out that there is an abundance of health and safety tools in place and that nearly all other sectors of the U.S. economy—including domestic air travel—are operating without a federal requirement for testing.

More than 260 travel and business organizations called on the Biden Administration to eliminate the testing requirement last week.

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Speedy Group Recovery Boosts Hyatt’s Q1

Citing the return of group business at a pace that “was significantly ahead of our expectations,” Hyatt hotels Corp. on Tuesday reported first-quarter performance that, like its competitors, started slowly but accelerated based on red-hot leisure demand and burgeoning corporate travel bookings. 

Group bookings, though, were “where we saw the most pronounced recovery during the quarter,” Hyatt president and CEO Mark Hoplamazian said on an earnings call with analysts. Systemwide group revenue in April 2022 was 14 percent below 2019 levels, he said, up from 25 percent in March and 43 percent in the fourth quarter of 2021. 

“We’ve heard repeatedly from meeting planners how impactful it is the reconnecting person for association and corporate customers alike, a sentiment that is evident in our group booking momentum,” Hoplamazian said. “Large group bookings driven by corporations with strong food and beverage spend are contributing significantly to our recovery.”

At full-service Hyatt properties in the Americas, the group booking pace through December 2022 is 12 percent off 2019 levels. “The continued strength in short-term bookings, the vast majority of which are corporate, gives us full conviction that group will continue to narrow the gap to 2019 levels over the course of this year,” Hoplamazian said.

April systemwide business transient levels reached 53 percent of 2019 levels, a figure that stood at 59 percent in the Americas, he said. Large national accounts improved to 54 percent recovered in April from 36 percent in February. Future business transient bookings in April were about 65 percent of 2019 levels, he said. 

“Consulting companies and industries with a heavy focus on sales of products and services are leading the recovery with some of those firms now running in excess of 2019 travel levels, and demand continues to broaden across industries with each passing week,” Hoplamazian said. “We remain optimistic about the recovery of business transient and its continued momentum over the back half of the year.”

Q1 Performance

Hyatt’s comparable first-quarter systemwide revenue per available room increased 107 percent year over year to $93.98, and in the U.S. increased 126 percent to $104.45. Systemwide RevPAR in April was 9 percent below 2019 levels, Hoplamazian said.

Increasing rates outside of China have fueled Hyatt’s RevPAR recovery, Hoplamazian said. Hyatt’s average daily rate in March was $195 and in April was $199, “the two highest ADR months in Hyatt’s history,” he said.

Hyatt’s first-quarter earnings before interest, taxes, depreciation and amortization increased to $169 million, compared with a loss of $20 million one year prior. The company in Q1 had a net loss of $73 million, compared with a loss of $304 million in the first quarter of 2021.

Outside of Apple Leisure Group, which Hyatt acquired last year, adding about 100 properties to its portfolio, Hyatt as of March 31 had executed management or franchised contracts for approximately 105,000 rooms, up about 5 percent year over year.

RELATED: Hyatt Q4 performance

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IAG: ‘Steady’ Recovery in Q1 Corp. Travel

British Airways parent International Airlines Group’s first-quarter 2022 loss of €754 million ($795 million) was due to normal seasonality, the effect of the Covid-19 omicron variant in January and February—which in particular reduced business demand—and the cost of ramping the business back up, IAG CFO Nicholas Cadbury said Friday during a first-quarter earnings call. 

The loss, however, was partially offset by the end of the quarter by the continuing strong performance of premium leisure and “the solid return of business traffic,” Cadbury added, with the continued easing of government travel restrictions, “particularly in the U.K.,” resulting in a significant improvement in travel demand, with a “good steady recovery in business travel.”

British Airways’ premium-class business revenue recovered from 20 percent of 2019 levels in January to 45 percent in March. For Iberia, premium business was about 40 percent recovered in January and 60 percent in March. “The partial recovery in business travel is consistent with the return of many companies to the office, particularly in London, Madrid and the U.S.,” Cadbury said.

The total business segment is “around 67 percent” recovered from 2019 levels, IAG CEO Luis Gallego said. “Business traffic is coming back.”

Broken down by vertical, banking and finance have recovered to around 65 percent from 2019, according to Gallego, while some investment banks are back to almost 100 percent levels on North Atlantic routes, Cadbury added. In April, BA’s business-channel bookings of North Atlantic routes recovered to 90 percent of 2019 levels. The technology and pharmaceutical sectors have recovered “the least,” Gallego said, while small and midsize businesses have recovered the most.

IAG reported first-quarter revenue of €3.4 billion ($3.6 billion) with passenger revenue of nearly €2.7 billion ($2.8 billion). Both were significantly up from Q1 2021 figures of €963 million ($1 billion) and €454 million ($479 million), respectively. Available seat kilometers were just over 49,000 compared with nearly 15,000 one year prior.

First-quarter 2022 capacity was at about 65 percent of 2019 levels, Gallego said. The company plans to operate capacity at 80 percent of 2019 levels for the second quarter and 85 percent for the third quarter. IAG also expects to restore a full network on North Atlantic routes by the third quarter, but with a slightly lower capacity of 95 percent compared to three years ago. The company anticipates full-year 2022 capacity to be around 80 percent recovered. 

IAG also expects to be profitable “at the operating level” from the second quarter and for full-year 2022, Gallego said, despite a significant increase in the price of jet fuel. To date, the company has not seen a noticeable effect on demand from the conflict in Ukraine, but many long-haul markets remain shut in most of Asia, he said.

BA’s performance also was negatively affected by “well-publicized” disruptions at Heathrow, “with a total impact of around €50 million ($53 million) in the quarter, impacting both revenues and costs,” Cadbury added.  

RELATED: IAG Q4 2021 earnings

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Gap between business and leisure travel recovery narrows

Leisure travel demand has spearheaded the global recovery of travel but business travel, which has consistently lagged behind, is now closing the gap, according to global distribution system Sabre.

Speaking on a Q1 earnings call this week, Sabre CEO Sean Menke noted that corporate and international travel had rebounded sharply during the opening months of the year.

“The recovery which has historically been driven by domestic, leisure travel is being supported by strong improvements in both international and corporate travel. Accelerating activity in each of these sectors made April our best month compared to 2019 in terms of bookings recovery since the onset of the Covid-19 pandemic,” he said.

The difference in recovery between Sabre’s ‘domestic TMC’ and ‘non-TMC’ bookings stood at 37 per cent a year ago in April 2021 but has now closed to just 7 per cent.

“The overall improvement in each global geographic region has been particularly positive, supported by a significant return of more profitable international and corporate travel,” said Menke.

“Although still below the total recovery of most other sectors, the financial, consulting and IT sectors, which are historically heavy travellers, ended Q1 accelerating rapidly, faster than at any point since the pandemic started. These sectors also ended the quarter at their highest levels of overall recovery since the pandemic began.”

Sabre’s distribution revenue increased 126 per cent year over year to $343 million in Q1, with total net bookings growing to 65 million – 42 per cent of the first-quarter 2019 total.

Speaking on a webinar later in the week for the launch of a new report, Mapping travel’s new normal, Sabre’s Andy Finkelstein, senior VP of global agency sales and corporate solutions said: “We’ve been waiting for this rebound to kick in. It’s going to be a competitive business environment and we’ll see a necessity for people to get back on the road conducting business. Showing up in person really counts.”

He continued: “Some companies are doubling down on having large corporate headquarters and on the other extreme you have the Airbnbs of the world and I think there’s a lot in the middle that are taking hybrid approaches to workplace settings.

“What’s true in all those circumstances is that there’s still the need and desire to connect and to drive company culture and the initiatives where collaboration is key. Companies are going to have to re-think internal travel policies both for what makes sense for the organisation but also for maintaining the right controls from a cost perspective.”

He added: “I think policy generally in a corporate environment is going to have to be a lot more dynamic than it has been in the past.”

The organisation’s survey of more than 500 travel leaders found two-thirds of respondents believe travel will fully return to pre-pandemic levels by the end of 2024, while one-third said it will happen in 2025 or beyond.

Meanwhile, 82 per cent of airline executives surveyed believe the combination of business and leisure trips to be even more prominent post-recovery.

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Holiday Inn Owner IHG’s Room Revenue Surges on Travel Recovery | Investing News

(Reuters) – Intercontinental Hotels Group on Friday signalled a sharp recovery in the hospitality sector as people gradually resume leisure and business travel after countries eased pandemic-related restrictions.

Holiday Inn owner’s RevPAR, or revenue per available room, was up 61% for the three months ended March 31, as the group saw improved trading in its Americas and EMEAA regions.

(Reporting by Shanima A in Bengaluru; Editing by Sherry Jacob-Phillips)

Copyright 2022 Thomson Reuters.

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