The CEO identified the restaurant category as the company’s fastest-growing category within the broader travel and entertainment spending classification. Overall, T&E spending rose by a smaller 6% for the third quarter over last year, according to the results.

Still, the third-quarter restaurant spending growth rate has come down from an 8% pace for each of the first two quarters of this year. It was even higher last year, at 11% year-over-year in the fourth quarter, and at 13% in the third quarter.

In any case, Amex’s net results were an improvement over last year. The company reported third-quarter net income climbed 2% to $2.5 billion over the year-earlier period as revenue, net of interest expense, increased 8% to $15.4 billion.

American Express has plunged into enlarging its restaurant business, dangling restaurant perks that are part of its way of appealing to Millennial and Gen Z generations in particular.

To that end, Amex has purchased restaurant reservation system companies, including Tock this year for $400 million, along with the contactless payments firm Rooam, and Resy in 2019 for an undisclosed amount, as a way to pitch its services to those companies’ customers and to create new inroads with restaurants.

Squeri pointed out during the call that the restaurant category was not the company’s biggest T&E category before it made the Resy acquisition.

“Our expectations are that we will continue to gain share in that restaurant space,” he said. “Over the last five years, we've grown twice what the industry growth rate has been from a restaurant perspective.”

The company has been particularly focused on wooing the high-end restaurant clientele. Squeri noted during the call that a recent update of the company’s Gold card had a particular focus on the dining area. The Gold card is reserved for some of the company’s more top customers.

“We obviously are doubling down on [the] restaurant” category, Squeri said, noting the Tock and Rooam acquisitions. He also pointed to the “Gold Card refresh, which is a heavy dining product and it's targeted at a cohort — Millennial and Gen Z — that spend more on dining than any other cohort that we have, so we're pretty bullish on the restaurant industry.”

The restaurant focus is about courting the restaurant businesses too, analysts at the investment firm William Blair pointed out in a note to their clients about the Amex results. “In addition to connecting restaurant merchants with premium consumers, Amex’s dining assets provide restaurant operators with software to streamline operations and grow,” the William Blair analysts said Friday.

By Lynne Marek on Oct 21, 2024
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