Corporate Travel Management (CTM) saw its revenue rise to almost 70% of pre-pandemic levels in the quarter ending June 30 2022.
The Australian-based company also reported seeing a “strong demand” for business travel despite the current challenges surrounding capacity and sent a positive message about the prospects of 2023.
Managing director Jamie Pherous praised the news and shared his optimism for the travel management company in its earnings announcement. He said: “Our customers are embracing the opportunity to return to face-to-face connectivity in a post-Covid world.”
CTM’s quarterly report shows that demand for corporate travel “remained strong” in North America throughout the quarter, the last of its 2022 fiscal year. Revenues for the region hit 73% of the same quarter in 2019. This also accounts for the 2020 acquisition of Travel and Transport, which should boost the region once integrated onto one system by the end of the summer.
CEO for North America Kevin O’Malley said the region made up 56% of CTM’s overall revenue and other income for the fiscal year. While Europe recovered to 86% of 2019 levels, according to the quarterly report. CTM said this is likely due to a “combination of client wins, new contracts and broad recovery.”
Another positive gain for the travel management company saw earnings before interest, taxes, amortisation and depreciation in the region reach 108% of pre-pandemic levels. It is the first area to rise above the 100% mark in that category.
Australia and New Zealand saw the most rapid recovery levels through the quarter, with revenues hitting 64% of 2019 levels. However, its recovery lagged in part due to less international travel. This is compared to June which saw revenue reach 74% of pre-pandemic levels, with international travel becoming a bigger portion of the mix.
Revenue recovery in Asia remained lower at 39% of 2019 levels, particularly due to China where international travel remains widely prohibited and borders closed.
CTM also announced a greater market share within the wider corporate travel market and a 97% client retention rate. Pherous explained that those clients who remain loyal had fees that were either the same or increased. He commented: “Clients are really valuing going-the-extra-mile services, and clients are prepared to pay for that.”
The company expects recovery to continue in the coming months due to travel programme recovery and additional market share gains. If follows a May survey of CTM clients which revealed 80% expected to spend as much or more in the 2023 fiscal year than they did prior to the pandemic. A full recovery is estimated in the 2024 fiscal year, based on current forecasts from the International Air Transport Association.
CTM recovering faster than broader corporate travel market
CTM said its European branch had benefited from new client wins and a “broad recovery” of travel in the region. The travel management company recorded a 94% year-on-year increase in revenue to $389 million for the financial year to June 30, 2022 compared to 2021 figures.
The company also made “underlying” earnings before interest, taxes, depreciation and amortisation of $59.8 million for the 2021 to 2022 financial year. This is compared with a loss of $7.2 million in the previous year.
Pherous commented: “Following the removal of most border and travel restrictions globally, the fourth quarter momentum makes us optimistic for the future, and we are pleased that the business has successfully translated that momentum into earnings.”
The MD added how the company is “a different business than it was prior to the Covid-19 pandemic” that it is larger, more diverse and relevant to its market globally.