Rosenbluth International Inc. History

Address:
2401 Walnut Street
Philadelphia, Pennsylvania 19103-4390
U.S.A.

Telephone: (215) 977-4800
Fax: (215) 977-4026

Private Company
Founded: 1892
Employees: 3,000
Sales: $2.5 billion
SICs: 4724 Travel Agencies; 8742 Management Consulting Services

Company History:

Rosenbluth International, Inc. is the world's third largest travel management company. The company offers comprehensive corporate, vacation, and meeting travel services. A family-owned business for more than 100 years, Rosenbluth International has over 1,000 locations in more than 30 countries, and maintains its world headquarters in Philadelphia.

In 1892, Marcus Rosenbluth, a Hungarian immigrant, founded Rosenbluth Travel when he began selling steamship tickets from his Philadelphia neighborhood. For $50, his upstart company provided steamship passage from a European port to New York, helped passengers with their entry into the United States, and then arranged transportation from Ellis Island to Philadelphia.

The business relationship he maintained with his clients went beyond the sale of steamship tickets. Rosenbluth, who spoke nine languages, also became something of a family advisor to clients, giving them information and advice on such subjects as American citizenship. Once the immigrants settled and found jobs, many of them gave Marcus five and ten cents at a time until they had $50 in their account to bring over another family member to America. To help with this business dealing, Rosenbluth held a private banking license in addition to his travel agency license, but gave up the banking business in the 1930s to focus on travel.

Through two World Wars and the Great Depression, Rosenbluth Travel continued to focus on facilitating the immigration of thousands of Europeans entering America and gradually built a reputation for integrity and honesty. The founder's sons Joseph J. and Max Rosenbluth had also entered the business, opening larger offices in their original neighborhood back in 1927. World War II, however, brought the company and the rest of the travel industry to a halt.

In 1949, the company moved out of its original neighborhood headquarters into a new office in Philadelphia's main business and shopping sector. That move and the travel industry's postwar development were significant milestones for Rosenbluth Travel. In the early 1950s, Americans became enthusiastic over the idea of leisure travel, and cruises and package trips to Florida became very popular. The package trip, introduced by major airlines of the day, effectively broadened the scope of the market, allowing middle income families to afford and enjoy leisure travel. From Florida, the market expanded further, to include trips to the Caribbean, Mexico, and Europe. Commenting on the company's history to that point in a Travel Weekly article, Harold Rosenbluth, grandson of Marcus Rosenbluth, observed: "We note that the families we brought over from Europe in steerage, we eventually sent back to Europe [for a vacation] in first-class cabins on the great ocean liners."

In the early 1950s, the founder's sons Max and Joseph J. Rosenbluth turned over the family business to their own sons, Harold and Joseph W. Rosenbluth, who represented the third generation of Rosenbluth leaders. Along with Joe's sister Cecile Block and her husband Eugene, they ran what Harold referred to as an "oversized mom and pop" emphasizing leisure travel.

Cousins Harold and Joe Rosenbluth both attended the University of Pennsylvania. But while Joe joined the family business immediately after graduation, Harold pursued a law degree and began to practice corporate law. After only a few years as a lawyer, however, Harold left law in 1953 to join his cousin Harold at Rosenbluth Travel.

The company had been steadily gaining a reputation for reliable and personal service, evidenced by their willingness to speak personally to maitre d's and other staff on behalf of their customers and even by meeting their customers at the docks as their cruises returned to New York. Harold and Joe also decided to create more markets for their travel services. In one of their earliest collaborative promotions, Red and Blue Tours, the men obtained a list of students at their alma mater, Penn, and, targeting those students who lived farthest away from school, began offering to arrange for their trips home.

In the mid-1960s, the agency began handling accounts for corporate travel; among its first corporate clients was General Electric Aerospace. In 1967, the company celebrated its 75th anniversary and moved into new headquarters on Philadelphia's Walnut Street. The following year, however, tragedy struck. Joe Rosenbluth was killed when his plane crashed on the way to Puerto Rico.

In the mid-1970s, Harold Rosenbluth prepared to turn the business over to his sons Hal and Lee, who had recently graduated from college. Recalling his father's attitude toward the eventual shift in leadership, Hall remarked in a Travel Weekly article that his father "always said that the success of this company is that each generation has known when to let go and let the next generation take over." At the time, as Harold had been quick to discern, potential breakthroughs in computer technology and the deregulation of the airline industry would shake up the travel industry.

Hal and Lee Rosenbluth began by working their way up through the ranks at Rosenbluth Travel. Hal, who eventually became chief executive officer and president, started as a gofer, running errands and stamping brochures. He then worked as a travel consultant before moving up to the corporate travel. Lee, who would become chief operating officer and executive vice-president, started as a reservation agent arranging for hotel rooms and car rentals before serving in the company's bookkeeping department.

During the late 1970s, the emergence of computers, the deregulation of the airlines, and the growth of corporate travel caused tremendous changes at Rosenbluth and in the industry in general. By rapidly adapting to these changes, installing a computer system in their offices, for example, the company was able to experience rapid growth and industry leadership. Annual sales at Rosenbluth Travel climbed from $4 million in 1960 to $35 million in 1970 to $120 million in 1980, before hitting the billion dollar mark in the late 1980s. Rosenbluth's work force increased accordingly, from eight employees in 1960 to over 3,000 in the mid-1990s.

By the early 1980s, Rosenbluth had opened the travel industry's first reservation center, had began actively pursuing corporate accounts, and had introduced an "Airfare Guarantee," under which the firm avowed to always offer the lowest applicable airfare or to refund the difference. Moreover, the company's forays into the corporate travel sector of the market proved tremendously successful, prompting expansion and a shifting of priorities.

Indeed, Rosenbluth's focus had shifted considerably since the late 1950s, when 100 percent of its business was generated from leisure travel. The introduction of corporate travel services as well as meeting organization services offered by Rosenbluth claimed an increasingly important percentage of its total business. In fact, by 1980, the company's reported that 75 percent of its business was for corporate clients, while 20 percent was attributed to leisure travel, and the remaining five percent to what it referred to as meetings and incentives. An important milestone during this time was the 1984 awarding of the Du Pont corporate travel account to Rosenbluth, the largest such contract ever awarded to a travel agency. Moreover by 1995, a full 95 percent of business at Rosenbluth would be attributed to such corporate clients as Bristol-Meyers Squibb, Chevron, Chase Manhattan, Eastman Kodak, General Electric, NBC, and Scott Paper.

Although the leisure segment of Rosenbluth represented less then ten percent of the business in the mid-1990s, it still remained a successful, viable part of the company, producing about $100 million in gross annual sales. Within a marketplace driven by price, the company adhered to his commitment to personal service, offering innovative programs like the "Vacation Promise," which assured that, given certain limitations, Rosenbluth would either remedy any problems clients experienced with land arrangements during Rosenbluth package trips or issue a refund to the client. A Family Vacation Center was also established, featuring a Kids Test Flight Room where children about to embark on their first airplane flight might see the inside of an airplane and view a video describing a typical flight.

In the late 1980s, Rosenbluth began to expand its presence abroad, forming an international alliance of agencies in foreign countries. By 1992, Rosenbluth had 34 international associate agencies in 37 countries, including Austria, Belgium, France, Greece, Spain, Canada, Argentina, Egypt, Hong Kong, Japan, Saudi Arabia, and elsewhere. This brought the total number of Rosenbluth agencies to 1,280 worldwide. The company was also working on strengthening its presence in South America and opening negotiations in Russia. Global expansion, in fact, prompted the company to change its name to Rosenbluth International in 1992, on its 100th anniversary,

The use and development of computer systems and software also enhanced the growth of Rosenbluth. Regarded as a leader in automating the travel industry, Rosenbluth introduced the travel agency industry's first electronically linked trans-continental data distribution network. Rosenbluth was also the first firm to develop its own back office accounting and client reporting system, which offered corporate clients detailed reports on how their travel dollars were being spent. The company has also pioneered the development of software programs used in making airline reservations and in helping corporate clients evaluate car rental proposals and other travel expenses.

Striving to foster a good workplace environment for Rosenbluth employees, management began espousing an unusual precept: the customer comes second and the employee comes first. Toward that end, all employees are referred to as "associates," they were offered the best equipment and ongoing training programs, and their input on the company has been encouraged by upper management. Hal Rosenbluth co-authored a book about the importance of his organizational structure called The Customer Comes Second and Other Secrets of Exceptional Service.

The Rosenbluth management style has been successful for the company, and in 1993 Rosenbluth was named one of the "Ten Best Companies to Work for in America" by Business and Society Review. The company was judged on pay and benefits, opportunities for advancement, job security, pride in work and the company, the degree of openness and fairness, and the level of camaraderie among employees.

As the travel industry responded to a changing U.S. work environment and family structure, Rosenbluth continued to develop new and innovative ways to meet these changing needs. Specifically, Hal and Lee Rosenbluth predicted a need for additional corporate services beyond travel and were even considering branching out into janitorial, food, or data processing services. Nevertheless, with over a century of strong family leadership and a proven method of management, Rosenbluth International was poised to remain an industry leader in travel management services into the next century.

Further Reading:

  • Alter, Allan E., "Tracking System Aids Travelers," Computerworld, March 21, 1994, p. 12.
  • Case, John, "Many Happy Returns," Inc., October 1990, pp. 30--44.
  • Feuer, Dale, "Rosenbluth Travel: Training in an Unstable Environment," Training, May 1986, pp. 63--68.
  • "Focus on Rosenbluth Travel," supplement to Travel Weekly, February 13, 1992, 34 p.
  • Levering, Robert, "The Ten Best Companies to Work for in America," Business & Society Review, Spring 1993, pp. 26--38.
  • Murphy, Liz, "Family Business: Who's Minding the Store?," Sales & Marketing Management, July 1987, pp. 53--55.
  • Rosenbluth, Hal, "Tales from a Nonconformist Company," Harvard Business Review, July/August 1991, pp. 26--36.
  • Weinstein, Jeff, "Service Lessons form Most-Admired Companies," Restaurants & Institutions, December 15, 1994, pp. 34--38.

Source: International Directory of Company Histories, Vol. 14. St. James Press, 1996.