Corporate travel giant Rosenbluth International today announced it has acquired Biztravel.com and will launch a consumer-oriented travel site this fall.
Privately held Rosenbluth, which has roots in planning business trips for large corporations, is breaking new ground in the small business and consumer space with this venture.
But the move puts the $4 billion company in head-to-head competition with established online travel sites such as Expedia, Travelocity, and Preview
Travel, as well as sites run by airlines, hotels, and other travel suppliers.
As part of the deal, Rosenbluth teamed up with Continental Airlines, Marriott International, Sun Microsystems, and Excite@Home to create Rosenbluth Interactive, a subsidiary that will manage both Biztravel.com and the new consumer site. Rosenbluth will have a majority stake in the new company.
Financial terms of the acquisition were not disclosed.
Rosenbluth Interactive president Neal Bibeau said Biztravel.com will continue to operate under its own name, though Rosenbluth will revamp the site this fall, at about the same time it launches the new consumer site.
Rosenbluth's move comes one month after a study by Forrester Research indicated that top travel online travel sites such as Yahoo, Expedia, and
Southwest Airlines are consolidating. The study predicted that the online travel industry would soon shake out, with second- and third-tier players folding or getting acquired.
To differentiate itself from its competitors, Bibeau said Rosenbluth Interactive will focus on customer service, utilizing the parent company's call centers.
"People are not receiving the service that they would like to receive on the Internet," he said, adding that the company will build on Rosenbluth's relationships with its suppliers and its parent company's large customer base.
Jupiter Communications analyst Fiona Swerdlow said Rosenbluth Interactive's ties to its offline parent should lend an online advantage. Swerdlow said Rosenbluth will benefit by using the parent company's negotiating powers to obtain discounted fares and rates.
"Rosenbluth is pretty well positioned to be a leading contender in the online travel space," she said.
Jupiter expects the online travel market to grow from $2.2 billion in 1998 to $16 billion in 2003.