Rosenbluth Buys Majority Stake In Taiwan Agency

<FONT SIZE="+3"><B>Rosenbluth Buys Majority Stake In Taiwan Agency</B>

By David Marcus and John Westbrook

<I>Taipei </I>- As part of its Asia-Pacific strategy, Rosenbluth International will purchase majority ownership in Dragon Holiday-a Taiwan-based travel management company-in January.

Richard Zi, Dragon Holiday's founder and owner, will retain a 20 percent stake and will stay on as general manager for the Taipei-based corporate travel agency.

The relationship between the two companies is not a new one; Zi has represented Rosenbluth in the Chinese market for the past two years.

"During most of that time, we have been looking at ways for Rosenbluth to enter Taiwan," Zi said. "Because of government restrictions banning nearly all direct investment in the travel industry by foreign companies, we decided to wait for a change in regulations."

That change occurred in September, with an announcement by the Taipei government that the travel industry was to be removed from the restricted list-although, Zi said, "the Tourism Bureau told us that they do not yet know when the regulations will actually be changed."

In the meantime, Rosenbluth will take over the management of Dragon Holiday here, which is permitted under the existing regulations, and will begin doing business under the name of Rosenbluth International once the sale takes place. However, the actual purchase of Dragon Holiday will not be implemented until the changed regulations permit. Meanwhile, the name change in January is expected to facilitate the quick entry of the Rosenbluth name into the Chinese marketplace.

Rosenbluth's entry into the island's fast-paced business market is only part of a broad-based strategy to penetrate the corporate market in Taiwan and on the mainland.

Last year, the company teamed up with Shanghai Spring International, and in October of this year partnered with China Merchants International Travel Co. in Beijing. Merchants International operates in 14 other cities in China.

"We view Asia as the fastest-growing market for business travel," said Liz Joseph, a spokeswoman for Philadelephia-based Rosenbluth. "It holds a lot of opportunity for us, and we're increasing our presence there because our corporate clients are increasing their businesses in Asia-Pacific. For corporations in Asia and U.S. subsidiaries, it's not a common practice to watch what you're spending on T&E. What we're doing is educating them on how to save up to 30 percent on travel."

Rosenbluth will start its Taiwan operations with six major accounts, including Nike, Intel and Applied Materials. "We have a further 15 potential accounts in companies that Rosenbluth is already serving in other markets," Zi said.

"To be truly effective, a travel management company can't just have a list of worldwide locations," said Hal Rosenbluth, president and CEO, in a statement announcing the joint venture. "It must be globally linked-able to communicate, in real time, vital travel information across time zones, oceans and languages to each and every office around the world. Now, we can share this technology in Taiwan."

Zi said he expects the company's Taiwan business to double during the first year of operations. "While many firms would see a doubling of their business as very fast growth, we view it as being rather conservative," he said. "We feel, however, that it is much more important, in the beginning stages, to emphasize quality of service over growth."

The company will start operations with offices in Taipei and Hsinchu and hopes to open additional offices in Kaohsiung and Taichung by 1998. "It is a policy of the company to wait until we have accounts to service before opening an office in a city or region," Zi said.