American Express Global Business Travel (GBTG) just delivered a strong first quarter, exceeding expectations and setting the stage for a potentially explosive year. But beneath the headline numbers, a subtle shift in the company's customer mix could signal an even brighter future than analysts currently predict.

GBTG's success has long been fueled by the SME (small and medium enterprise) segment, which accounts for over half of their revenue. These smaller businesses, eager to leverage GBTG's expertise and technology, have consistently driven faster growth than larger Global Multinational clients. However, the Q1 2024 earnings call revealed a surprising reversal of this trend. For the first time since the travel industry's post-pandemic recovery, Global Multinational transactions surged ahead, growing at a robust 11% compared to a more modest 5% for SME.

While the company attributed the SME slowdown to macroeconomic pressures like inflation and interest rates, the strength in Global Multinationals goes beyond a simple rebound. GBTG highlighted double-digit growth across a wide range of industries, from professional services and pharma to energy and utilities. This broad-based surge suggests a fundamental shift in corporate travel behavior, with larger companies now aggressively embracing face-to-face interactions as a key driver of success in a post-pandemic world.

The data supports this hypothesis. GBTG's survey of its top 100 clients – a strong proxy for Global Multinational sentiment – revealed a dramatic 4 percentage point jump in their expected 2024 travel spend, now projected at 8%. Furthermore, the percentage of these clients anticipating increased travel volume over the year also climbed by 3 points. This growing optimism suggests that the shift in Global Multinational travel isn't a temporary blip, but rather the start of a sustained wave of growth.

Transaction Growth by Customer Segment (Q1 2024)

Global Multinational transactions grew at 11% while SME transaction growth was at 5%.

Now, consider the implications of this dynamic for GBTG's future. If Global Multinationals continue to drive outsized growth, the company could easily surpass its already strong guidance for the year. While analysts currently predict 6% to 9% revenue growth, a continued surge in Global Multinational spend, coupled with the expected acceleration in SME activity as macroeconomic conditions stabilize, could push this figure significantly higher.

Imagine this: a scenario where Global Multinational transactions maintain their 11% growth rate throughout 2024. Assuming SME growth recovers to a more moderate 8%, GBTG's overall transaction volume could reach close to 10% growth for the year. This would translate into a revenue growth rate potentially exceeding 12%, significantly outpacing current analyst expectations.

Furthermore, GBTG's acquisition of CWT, expected to close in the second half of the year, will further amplify this growth. Adding CWT's client base and global reach to GBTG's already impressive portfolio creates a travel behemoth with unparalleled market power and the potential to capture even more share of the $1.4 trillion global travel industry.

Here's the kicker: GBTG's strong financial model, built on a foundation of margin expansion and cash flow acceleration, is perfectly positioned to capitalize on this growth. Their investments in AI and automation are already driving significant cost savings, allowing them to scale rapidly and deliver outsized returns even in a stable growth environment.

So, what does this all mean for investors? GBTG's hidden signal – the surge in Global Multinational travel – could be a game-changer, propelling the company to even greater heights than previously anticipated. Their strong financial model, strategic acquisitions, and laser focus on technology make GBTG a compelling investment opportunity in a travel industry poised for continued growth.

"Fun Fact: The global business travel market is expected to reach $1.8 trillion by 2027, according to Allied Market Research. This represents a compound annual growth rate (CAGR) of 9.1% from 2021 to 2027."