American Express announced on Friday that spending on travel services during the period lagged behind expenditures on various goods and experiences. Christophe Le Caillec, the company’s Chief Financial Officer, explained during a major business broadcast that the decline in travel-related purchases primarily stems from stagnant revenues on domestic economy airfare.
Historically, American Express has attracted affluent customers who enjoy its exclusive travel and dining rewards. This strategic focus has helped the firm remain competitive even when broader consumer spending shows signs of slowing. In the second quarter, total spending on its cards advanced by 7 percent, mirroring growth seen in the previous quarter and surpassing the 6 percent rise from the same timeframe last year.
Despite the overall increase, travel spending did not keep pace with other categories; airline expenditures remained unchanged from the prior year. Ticket purchases for premium cabins rose by 10 percent, and luxury hotel bookings costing over $5,000 climbed by 9 percent. Conversely, low-cost domestic travel appears to be the weak link in the travel portfolio.
Industry expert Brian Foran of Truist expressed concern over this trend, noting that any slowdown in consumer spending on airlines might undermine American Express’s extensive partnerships with carriers and its access to airport lounges. Official labor statistics indicate that airfare prices declined by 3.5 percent in June compared to the previous year, meaning customers now pay less at the point of purchase, even as general inflation increased.
Following strong quarterly performance in profit and income, along with a confirmed 2025 outlook, stock values slipped by 2.5 percent during midday trading. Year-to-date, the firm’s shares have increased by less than 4 percent, lagging behind competitors such as JPMorgan Chase, Citigroup, and other financial service providers in the premium card market. Investors seem wary about rising expenditures associated with rewards programs as American Express introduces its updated Platinum card amid growing market competition.
