American Express 2006 Annual Report Download - page 25

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TRAVEL
Sales volume in our global travel business increased 6 percent in 2006, as airline fares and
hotel rates continued to rebound. Commissions and fees, however, remained essentially fl at
as the ongoing transition to online booking reduced average revenue per transaction and
competition intensifi ed.
U.S. Consumer Travel had a particularly strong year, with sales rising 27 percent. During
2006, we enhanced marketing programs with premium air, cruise and hotel partners. We
also continued to use offers and features tied to our Membership Rewards program to drive
traffi c to our Consumer Travel Web site. This helped lead to a nearly three-fold increase
in online transactions.
Our Business Travel clients increasingly chose our online channel as well, which is
consistent with the trend established over the past several years. Sales rose 3 percent for
corporate and international consumer travel. In an industry contending with lower
transaction commissions, we continued to build capabilities in advisory, expense manage-
ment and other services that help client companies to better manage their travel programs.
For example, in 2006, we established an Advisory Services organization dedicated to
helping clients control their travel costs. When clients save money, we earn a percentage
of the savings. We also partnered with Rearden Commerce to launch AXIOM, an online
marketplace of more than 135,000 suppliers that lets clients fi nd, purchase and manage
both traditional travel and related services, such as airport parking, dining and package
shipping. This site passes on negotiated savings from our merchant partners to clients,
and makes it easier for business travelers to book with approved suppliers.
consumer travel
Enhanced programs with premium
partners, such as the Fine Hotels & Resorts
program, contributed to Consumer
Travel’s strong year. The program offers
Platinum Cardmembers exclusive
amenities at over 500 luxury properties
around the world.
AMERICAN EXPRESS BANK
At American Express Bank, the tough interest rate environment continued to put pressure
on margins and reduce profi ts. Despite these diffi culties, the Bank continued to deepen
relationships with both institutional and private banking clients. Global payment volumes
rose 18 percent within the Financial Institutions Group, which provides services such as
international payments and trade fi nance. At the Private Bank, assets under management
increased 11 percent to $22.5 billion. Investment product holdings increased 26 percent,
as clients continued to diversify from deposits to other types of investments.
[ 23 ]
letter to shareholders