Monthly spending on travel and entertainment is increasing as the coronavirus vaccine rollout continues in the U.S., according to American Express Co. chairman and CEO Steve Squeri.
Squeri discussed recent spending trends last week during the company's first-quarter financial results call with investors.
"Although the T&E (travel and entertainment) volumes were significantly lower in the first quarter versus last year, we've seen a steady sequential upward trend in monthly T&E spending, and a noticeable improvement in recent weeks, particularly in the U.S. as the vaccine rollout accelerated," Squeri said, according to a transcript of the call by the website seekingalpha.com.
Squeri drew the conclusion that pent-up travel demand among consumers is real and is being led by domestic travel.
CFO Jeff Campbell agreed.
"We expect this trend to continue given the pent-up demand to travel that we see in our consumer base and the positive early signs of domestic travel recovery that we see in the U.S. as the vaccine rollout progresses," he said.
According to Campbell, American Express believes T&E spend will reach 70% of fourth quarter 2019 levels by the fourth quarter of this year, led by domestic travel among U.S. consumers. The company believes consumer T&E spending will return to prepandemic levels in 2022.
Travel bookings are also on the uptick. According to Squeri, bookings were up 50% in the first quarter of 2021 compared to the fourth quarter of 2020.
That uptick also appears to be accelerating. In February, travel bookings were at 31% of what they were in the same period of 2019. That increased to 50% in March.
"We feel realy good about that," Squeri said.
The CEO also said American Express will continue to strengthen its travel value propositions for card members going forward. For instance, the company continues to open airport lounges, more in demand by travelers for the "safety and security" the brand offers.