A case study on Corporate Branding

2. Rosewood, huh?

3. A private luxury hotel management company
12 hotels worldwide with 1513 roms

4. Initial Philosopy:Individual
Brand Strategy
Convert existing
iconic luxury hotels
with strong brand
equity
Eg: The Carlyle, Little
Dix Bay
Conceive and create
next generation of
luxury hotels, thereby
create brand equity
Eg: The Mansion on
Turtle Creek, Las
Ventanas al Paraiso

5. But then..!
Limitations of
this approach
Low Brand
Recognition
Low Cross
Selling

6. Possible
Solutions
Frequent
Stay/Loyalty
Program
Corporate
Branding

7. Corporate
Branding
Increases
Cross Selling
From 5-10%
to 10-15 %

8. Problems with
Branding
Marketing
Expense
Around 1
million dollars
Resistance
from individual
Brands
Managers and
private owners

9. Is it worth the money?

10. Let the Numbers decide!

11. Without
Rosewood
Branding(2003)
With
Rosewood
Corporate
Branding
Total number of unique guests 11500 115000
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 $130 $138.7
Average new guest acquisition expense $150 $150
Total number of repeat guests 19169 24919
Of which: number of multi-property guests 5750 11500
Average Guest Retention rate 16.7% 21.67%
Average Gross Profit Per Guest $576 624

12. Total NPV of CLTV without Corporate Brand
Years 0 1 2 3 4 5 6
Gross profit per
guest
609.50 646.07 684.83 725.92 769.48 815.65
Acquisition
expense per guest
150
Marketing expense
per guest
132.60 135.25 137.96 140.72 143.53 146.40
Net profit per
guest
(150.00) 476.90 510.82 546.88 585.21 625.95 669.25
Retention factor 1.00 0.2167 0.047 0.01 0.002 0
Discount factor 0.93 0.86 0.79 0.74 0.68 0.63
Net Present Value (150.00) 443.52 95.19 20.31 4.33 0.85 0
Total NPV = 414.2

13. Total NPV of CLTV with Corporate Brand
Years 0 1 2 3 4 5 6
Gross profit per
guest
661.44 701.13 743.19 787.79 835.05 885.16
Acquisition expense
per guest
150
Marketing expense
per guest
142.86 147.14 151.56 156.10 160.79 165.61
Net profit per guest (150.0) 518.58 553.98 591.64 631.68 674.27 719.55
Retention factor 1.00 0.2167 0.047 0.01 0.002 0
Discount factor 0.93 0.86 0.79 0.74 0.68 0.63
Net Present Value (150.0) 480.1 103.24 21.97 4.67 0.92 0
Total NPV = 460.9

14. Recommendation
• Numbers have proven; Corporate Branding is
the norm of the day.

15. Thank You!

16. Disclaimer
• Created by Nevin Padiyath during a
Marketing internship under Professor Sameer
Mathur of IIM Lucknow.