Branding to Increase Customer Profitability and Lifetime Value

1. Rosewood Hotels & Resorts
Branding to Increase
Customer Profitability and
Lifetime Value

3. 1. 12 hotels worldwide with a
capacity of 1513 rooms.

4. 2. Room Tariffs rate range from
$120 to $9000.

5. 3. John Scott is Rosewood’s new president
and CEO, and Robert Boulogne is vice
president of sales and marketing.

6. 4. Headquarters in Dallas, Texas

7. 5. Over 25 years ago, Caroline Rose Hunt
opened The Mansion, the first Rosewood
hotel, by transforming an old Dallas
mansion into a world-class restaurant &
hotel.

8. 6. Rosewood competed with two
groups of luxury hotels:
• i) Corporate branded:- Ritz-Carlton, Four
Seasons, St. Regis, One&Only, and Mandarin
Oriental hotels
• ii) Individually branded:-Unique hotels, such as
Auberge, RockResorts, and Orient-Express.

9. What were the strategies used by
Rosewood in operating its properties?

10. 1. Repositioning existing hotels.

11. 2. Building new world class hotels
and restaurants with a “sense of
place”.

12. What is the issue?

13. John Scott recognized that the
Rosewood brand had low
recognition and brand-wide usage
among guests was an untapped
asset.

14. Their emphasis on individual
property brands was not working
from a number of fronts.

15. 5% of Rosewood guests had stayed in
more than one of Rosewood’s
properties while corporate-branded
hotels enjoyed 10% to 15% cross-
property
usage rates.

16. Rosewood was at the low end of
the scale and management felt
there was an
opportunity for increasing cross-
property usage.

17. What are the
possible solutions?

18. 1.Frequent stay program

19. • Proved successful for large multiple-segment
operators with broad geographic distribution.
• Loyalty was fostered by offering benefits
like room upgrades, flexible check-in and
check-out, personalized services, etc.

20. 2.Corporate Branding Approach

21. What are the pros and cons of
corporate branding approach?

22. Pros:
• Collective experience
• Encourage guests to use more than one
property
• Better brand recognition
• High customer loyalty.

23. Cons:
• Internal Resistance: Few hotel managers are
inclined to promote their own hotels rather than
promoting Rosewood
• Some corporate guests didn’t want to be a part of
a bigger organization due to their emotional
attachment to a particular hotel.

24. Scenario with an introduction of corporate
branding-
Parameters Without Rosewood
Branding (2003)
With Rosewood
Corporate Branding
Total number of unique guests 115,000 115,000
Average daily spend $750 $750
Number of days average guest stays 2 2
Average gross margin per room 32% 32%
Average number of visits per year per guest 1.2 1.3
Average marketing expense per guest
(systemwide)
$130 $139
Average new guest acquisition expense
(systemwide)
$150 $150
Total number of repeat guests 19,169 24919
Of which: Total number of multi-property stay
guests
5,750 11500
Average Guest Retention Rate 16.67% 21.67%

26. Suggestions for Corporate Branding:
• Don’t dilute individual brand persona
• Subtly add Rosewood to it
• Get internal teams confidence
• Build a Rosewood membership plan
• Tie up with more travel agencies

27. Thank You

28. DISCLAIMER
Created by Tamishra Ray, BPPIMT, Kolkata,
during a marketing internship by Prof. Sameer
Mathur, IIM Lucknow.