closes shop after bookings plummet

The faltering economy and last week's terrorist attacks have forced travel site to cease operations and lay off all its employees.

Philadelphia-based Rosenbluth Interactive Inc., Biztravel's parent company, announced the layoffs and the closure of the Web site this morning.

"Biztravel has been unable to overcome the challenges of the economic downturn, the further-reduced demand for travel resulting from the tragedy of [Sept. 11] and the ever-increasing economic pressures of the travel industry," said Marc Kaelin, vice president of Biztravel.

Kaelin said bookings dropped by as much as 70 percent last week, which is in line with what other online travel sites have reported.

Rosenbluth Interactive was established as an affiliate company of Rosenbluth International in 1999 and soon thereafter acquired

Kaelin said in an interview that Biztravel will be sending an e-mail to its customers soon to explain the closure and what it will mean for those with travel booked before the closure.

"For those Biztravel customers who have questions or issues regarding outstanding travel arrangements booked through, please contact the airlines, rental car companies or hotels directly," the site said in a statement on its home page.

Employees were told of the closure and layoffs yesterday. Kaelin wouldn't say how many employees Biztravel, which is a private company, had before the layoffs. He also declined comment on the possibility of Rosenbluth taking over some of Biztravel's business.

The news follows deep workforce cuts at several airlines and a dramatic drop in air travel bookings following the terrorist attacks Sept. 11 involving four commercial airliners. At the same time, at least two of the major reservations systems that handle flight information requests have had to add capacity to handle additional traffic created by travelers forced to cancel or rebook flights not completed last week when airports were closed (see story).

Last week's events put an otherwise shaky industry in deeper trouble, analysts say. The airlines have been in financial trouble since the beginning of the year. According to media reports, the White House and Congress are reportedly close to a US$15 billion aid package for the industry.

Business travel is a significant source of income for the airlines, and the drop in business travel bookings has hurt the industry, and particularly Biztravel, which specialized in business travel, Kaelin said.

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