American Express to Close Its Storefront Agencies

American Express is closing its 20 company-owned storefront locations in the U.S., citing what it called a shift in how customers interact with its travel advisors.

The closings, which will happen by the end of the year, are based on “customer preferences,” said American Express spokeswoman Tracy Paurowksi.

“A lot has changed over the years in how clients contact our travel counselors,” she said. “Phone and email have become the predominant way they talk to counselors.” Much of the agents’ business is also repeat clients or referrals who don’t need to visit a retail office, she said.

Given those changes, the company doesn’t see the need for storefront locations, Paurowski said.

Pulling back?
Paurowski denied that the closures are a signal that American Express is pulling back from its retail travel business.

“Absolutely not,” Paurowski said.

She added that the American Express Travel Representative Network, the company’s franchisees, will continue to give clients the option of visiting a retail American Express location.

“In most locations where we’ve had retail offices there’s also a franchise operation,” she said. “Clients don’t distinguish between an office that’s owned by American Express and a franchise.”

In addition to the company-owned brick and mortar locations that will be closed and the franchise locations, American Express operates customer call centers and a work-at-home network of travel advisors.

Severed ties in Canada
Two years ago, American Express severed ties with its independent travel agency affiliates in Canada, saying these agencies would be better served by a partner whose focus is consumer travel. The move took Canadian agents by surprise.

Paurowski said the U.S. and Canadian operations are separate and she couldn’t comment on that action.

In another move, this past spring American Express sold tour operator Travel Impressions to the Apple Leisure Group, parent of Apple Vacations.

Under the agreement, Travel Impressions was to continue to operate as a separate brand from Apple Vacations and will be the operator or brand manager of American Express Vacations International through a licensing agreement with American Express Travel.

Not a cost-saving move
Paurowski also said the U.S. closures are not a cost-saving effort.

American Express has experienced record-breaking sales for its proprietary business this year and in 2012, Paurowski reported.

Its second quarter 2013 sales volume was the highest in company history, she added. (American Express does not disclose earnings figures.)

Shift to home-based
American Express has been growing its home-based business in recent years. Currently about 25% of its travel counselors nationwide work at home, according to Paurowski.

That figure includes both agents in its call centers and a much lower number of agents from its storefront locations who also have been working from home.