American Express to downsize global business travel sector
Monday, January 21, 2013
The global economic situation has many people concerned, from Main Street to Wall Street. While professional organizations such as the Global Business Travel Association remain confident that business travel will grow by almost 5 percent this year, confidence in the sector is lacking elsewhere, particularly at financial services giant American Express (Amex). According to Business Travel News, Amex plans to substantially reduce its workforce this year, and many of the redundancies are expected to be seen in the company's business travel business.
Most of the job losses will affect sectors that generate little revenue. Officials at Amex claim that the fluctuations in the global business travel sector have necessitated substantial downsizing, and that they foresaw the move several years ago.
"The economics of business travel have changed more dramatically over the years than any other part of our business, but we've moved more things online and that will continue," said ?Ken Chenault, chairman and chief executive officer of Amex, as quoted by the news source. "We've been ahead of the curve over the last several years. Our intent by this restructuring is to continue to be ahead of the curve."
For firms that anticipate increased business travel spending this year, the need to reduce costs will be paramount. As rates and occupancy increases at corporate suites in chain hotels around the world, serviced apartments and corporate housing could become increasingly attractive options for budget-conscious travelers.