Read Aloud the Text Content

This audio was created by Woord's Text to Speech service by content creators from all around the world.

Text Content or SSML code:

Rosenbluth International (➥THE PROBLEM rosenbluth.com) is a major global player in the extremely competitive travel agent industry. Rosenbluth’s mission is “to be the quality leader in the development and distribution of global travel services and infor- mation.” The digital revolution has introduced various threats and business pressures to Rosenbluth and other agencies in the industry: 1. Airlines, hotels, and other service providers are attempting to displace travel agents by moving aggressively to electronic distribution systems (e.g., airlines are issuing electronic tickets and groups of airlines are sponsoring selling portals for direct sale of tickets and packages). 2. Some travel service providers have reduced commissions caps and have cut the commission percentage for travel agents from 10 percent to 8 and then to 5 percent. 3. A number of new online companies such as expedia.com are providing diversified travel services as well as bargain prices, mostly to attract individ- ual travelers. These services are penetrating to the corporate travel area, which has been the “bread and butter” of the travel agents’ business. 4. The competition among the major players is rebate-based. The travel agen- cies basically give back to their customers part of the commission they get from travel service providers. 5. Innovative business models that were introduced by e-commerce, such as auc- tions and reverse auctions, were embraced by the providers in the industry, adding to competitive pressures on travel agencies (see Turban et al., 2004). All of these business pressures threatened the welfare of Rosenbluth.