Branding to Increase Customer Profitability and Lifetime Value l the SIXers MM UI 2012

Rosewood Hotels & Resorts :

Dame Reiny

Frisca ListyaDewi Sagita

Ali Yudhi

Dewi Aryani

Rosewood Facts

ROSEWOOD HOTELS & RESORTS (ROSEWOOD) is a private hotel management company .• operated a “collection” of individually branded unique

hotels & resorts• Has global reputation with iconic luxury hotels

HISTORYRosewood Facts

1979• The Caroline

Rose Hunt Trust Estate

1984• Hotel Hana

Maui, Hawaii

Properties GrowthProperties Growth

Rosewood Facts

05

10152025

13

6 6

0 1 2

25

1210

85

4 1996

2003

Rosewood Facts

ROSEWOOD BRAND“A Sense of Place”

Rosewood Facts

Rosewood Facts

Rosewood Theory

Building Brand Equity

Rosewood Theory

Aakers Brand Equity ModelAakers Brand Equity Model

Rosewood Theory

Calculating Customer Lifetime ValueCalculating Customer Lifetime ValueCustomer lifetime value (CLV) describes the net present value of the stream of future profits expected over the customer’s lifetime purchases

Rosewood Theory

Branding StrategyBranding Strategy

Rosewood Analysis

Pro’s and Con’sPro’s and Con’s

Rosewood Analysis

• Better CLTV• Collective Experience (duplicate

standard)• Consistent Service• Encourage guest to use more than

one properties• Better Brand Recognition• High customer loyalty (Rosewood

Junkies)

• Inconsistency in brand wide performance standard

• Increase Marketing Cost for re-branding• Resistant from owner, guest, manager• Guest feel alienate• Bad Reputation may impact others

Individual Branding

Revenue and Cost AnalysisRevenue and Cost AnalysisWithout Rosewood Branding

(2003)With Rosewood Corporate

Branding Total number of unique guests (a) 115,000.00 115,000.00Average daily spend (b) $750.00 $750.00Number of days average guest stays 2 2Average gross margin per room 32% 32%Average number of visits per year per guest 1.2 1.2

Average marketing expense per guest (system-wide) d

$130.00 $138.70

Average new guest acquisition expense (system-wide)

$150.00 $150.00

Total number of repeat guests (e) 19,169 24,919

Of which: Total number of multi-property stay guests

5,750 11,500

Number of Multiproperty Guest 5% 10%Average Guest Retention Rate (f) 16.67% 21.67%Average Gross Profit per Guest $576.00 $624.00

Rosewood Analysis

Total NPV of CLTV wTotal NPV of CLTV without ithout Corporate BrandCorporate Brand

Rosewood Analysis

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 new guest 115.00 Marketing expense per guest

132.60

135.25

137.96

140.72

143.53

146.40

Net Profit per Guest (115.00)

476.90

510.82

546.88

585.21

625.95

669.25

Retention factor 1.00

0.22

0.05

0.01

0.00

0.00

Discount factor 0.93

0.86

0.79

0.74

0.68

0.63

Net Present Value (NPV) (115.00)

441.58

94.90

20.38 4.38

0.94

0.20

448.62

Total NPV of CLTV withTotal NPV of CLTV with Corporate BrandCorporate Brand

Rosewood Analysis

Years 0 1 2 3 4 5 6

Gross profit per guest 661.44 701.13 743.19 787.79 835.05 885.16Acquisition expense per new guest 115 Marketing expense per guest 142.86 147.14 151.56 156.10 160.79 165.61

Net Profit per Guest (115.00) 518.58 553.98 591.64 631.68 674.27 719.55

Retention factor 1.00 0.22 0.05 0.01 0.00 0.00

Discount factor 0.93 0.86 0.79 0.74 0.68 0.63

Net Present Value (NPV) (115.00) 480.17 102.92 22.05 4.72 1.01 0.22

Total NPV 496.09

Rosewood Recommendation

• Adopt Corporate Branding• Strengthen Rosewood’s Brand

Equity

Rosewood Analysis

Rosewood Analysis

Rosewood Analysis

Rosewood Video

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