Amex Spinoff Brings New Partners, New Promises

In corporate travel, it’s all about the data, especially for big global customers, says American Express. With a new joint venture about to bring in $900 million for its Global Business Travel division, American Express will have fresh funding to invest in technology.

American Express announced in March that it had finalized terms for a previously announced spinoff of its Global Business Travel (GBT) division..

An investment group made up of Certares, Qatar Investment Authority, BlackRock and Macquarie Capital will invest $900 million in return for a 50% stake, and American Express will retain the other 50%. The deal is set to close in June.

Technology-focused
With the deal moving forward, American Express is focusing on “further developing innovative technology that is flexible, functional and disruptive, while also continuing to provide deep insight to our customers,” vice president Patricia Partelow, who heads Global Business Consulting, told Travel Market Report.

The global mega-agency said in March the infusion of capital from the joint venture would provide resources to “build upon GBT’s technology innovations to support digital and premium servicing capabilities, mobile applications, improved reporting tools and itinerary management solutions, as well as the customer service expertise for which American Express is renowned.”

Bill Glenn, formerly president of Global Commercial Services, will be president and CEO of the joint venture. Greg O’Hara, Certares founder and former co-chair of Travel Leaders Group, will be chairman. (O’Hara stepped down as co-chair of Travel Leaders Group immediately prior to the March announcement from American Express; he continues to serve on Travel Leaders’ board of directors.)

Client priorities
Partelow told Travel Market Report that larger clients with more mature travel programs increasingly are asking for more actionable information, more quickly.

They are also interested in leveraging the consolidated reporting of card and travel data and improving the end-to-end traveler experience for today’s connected business traveler.  

In the middle market, meanwhile, many customers are looking for greater visibility into their programs and access to benchmarking.  

Amex priorities
For both sets of customers, the larger and the smaller, American Express this year hopes to develop “innovative technology that is flexible, functional, and disruptive, while also continuing to provide deep insight to our customers,” Partelow said.

“Our view of the business travel environment overall is that it is constantly evolving, with companies expanding and becoming more mobile, sophisticated and global,” Partelow said.

“With rising adoption rates and an increased reliance on digital tools and mobile devices, the space is becoming increasingly more digital and complex, and elevating the need for standardization and continuous innovation.”

Watch and wait
Meanwhile, other large TMCs are watching and waiting to see what the spinoff by American Express means.

Some say it’s no big surprise to see the agency turn its focus away from travel, saying American Express has always made its money from its corporate card, rather than the TMC side of the house.

“Travel has always been a means to an end for American Express. They’ve driven down service fees, and now it’s all about the card. That’s where they make their money,” said the owner of one large agency, speaking off the record.

Good news for competitors?
Travel and Transport chairman and COO Bill Tech said the spinoff will cause some confusion among corporate clients – and will be good for its competitors in the short term.

“If you picked American Express because of ABC, now it may be doing XYZ. It will be interesting to see how it plays out,” Tech said. “I think existing clients will stay, and give them a chance.

“But if I’m a new customer I’d be leery and choose someone else until this all rolls out. And that’s good for the market.”