Family owned Rosenbluth International, the second-largest presence in travel management with corporate-owned offices in 27 countries, has agreed to a takeover by American Express (AMEX), solidifying its position as top dog in the corporate travel industry.
“This was a very emotional process for Hal and one of the most difficult decisions of his life”.
The expected sale of Rosenbluth International
is the latest acquisition of corporate giant AMEX, who has a track record of successful acquisitions including Travel One and the global corporate travel business of Thomas Cook Travel.
was attracted to Rosenbluth because of its history of customer service and innovation, its customer base and its corporate culture as well as its products and services.
As supplier commissions have declined in recent years, businesses now pay travel agencies for services. It has become essential for agencies to change their business models in order to be more cost efficient.
Rosenbluth executives have been very outspoken about the need for consolidation within the industry in recent months.
A Rosenbluth spokesperson told ITN “Despite the industry turbulence of the past few years, Rosenbluth has been very successful and it was from this position of strength that it was possible for us to select who we wanted to combine with to create a company that would become the pre-eminent travel management company in the world”
AMEX said that the acquisition would accelerate their efforts to transform relationships with suppliers through unique technology developments within their network by increasing their size and global reach.
Kim Lewis, Senior Vice President, Head of Corporate Travel, Europe, American Express told ITN: “Our goal is to drive change in the travel industry - we want to be the most efficient channel of distribution for suppliers, and the most effective way for corporate clients to manage their travel expenses”
The terms of the transaction will not be disclosed.
Rosenbluth has evolved from a modest company in 1892, to the second-largest presence in travel management.
joined Rosenbluth in 1974, becoming the fourth generation to lead the family business, taking it from a $20 million to a $6 billion company.
As the integration process moves forward, the name will eventually be discontinued. I am told that: “This was a very emotional process for Hal and one of the most difficult decisions of his life”.
Recently named a 20/20 Vision honoree, Hal Rosenbluth is amongst the top brains in the travel industry. He has been noted for his ability to recognise, deploy and shepherd technology ideas that have impacted and continue to impact our industry.
Although Mr. Rosenbluth will be play an active role
in both planning and guiding the integration process, there is no mention of Hal’s role in the long term. The fates of board have not yet been determined.
Rosenbluth has been a key player in the market for over a century, but given recent trends of the industry; a softening economy, the war with Iraq and the SARS epidemic, this acquisition seems to have come at an appropriate time.
Various large players including both American Express Corporate Travel and Rosenbluth have remained profitable in spite of many pressures. AMEX sites its flexible business model as its key to success.
“Our Corporate Travel business is profitable despite the current economic cycle because we have adapted our corporate travel business model to be flexible enough to keep costs in line with the rise and fall of business volume.” Commented Kim Lewis.
She added: “The travel industry is currently undergoing continued turbulence, and we believe that through growth, we will be better positioned to effect positive change for both our customers and the suppliers who recognise our importance as an efficient distribution channel to the corporate customer segment”.
The deal is subject to mandatory regulatory review in the U.S., as well as in some international jurisdictions. The transaction is expected to be completed in the next few months.