rosewood hotels and resorts: a case study
Post on 12-Feb-2017
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Rosewood, huh?
A private luxury hotel management company
12 hotels worldwide with 1513 roms
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
1990s
But then..!
Limitations of this
approach
Low Brand Recognition
Low Cross Selling
Possible Solutions
Frequent Stay/Loyalty
Program
Corporate Branding
Corporate Branding
Increases Cross
Selling
From 5-10% to 10-15 %
Problems with Branding
Marketing Expense
Around 1 million dollars
Resistance from individual
Brands
Managers and private owners
Is it worth the money?
Let the Numbers decide!
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
Total NPV of CLTV without Corporate BrandYears 0 1 2 3 4 5 6Gross 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
Total NPV of CLTV with Corporate BrandYears 0 1 2 3 4 5 6Gross 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
Recommendation
• Numbers have proven; Corporate Branding is the norm of the day.
Thank You!
Disclaimer
• Created by Nevin Padiyath during a Marketing internship under Professor Sameer Mathur of IIM Lucknow.
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