ROSEWOOD HOTELS & RESORTS:

BRANDING TO INCREASE CUSTOMER

PROFITABILITY AND LIFETIME VALUE
Mamatha Manu (2016086)
Neil DSouza (2016094)
Vasudha Bajoria (2016121)
Vishakha Nara (2016122)

EXISTING BRAND STRATEGY

1. To begin with rosewood hotels & resorts would follow individual branding.
2. It was known for its ability to intensify property value
3. Unlike other luxury hotels that follow corporate brand model, rosewood
choose to function as a collection of unique properties, each with its own
name or brand
4. They have tried to build their brand based on the philosophy A sense of
place

REASONS FOR CONSIDERING A NEW BRAND STRATEGY

Low brand awareness rosewood logo was restricted to low-profile amenities
Build a customer lifetime value boost guest retention and cross selling
Rosewood had a 5% cross-selling rate as compared to a rate of 10-15% in corporate branding and 5-10% in
individually branded hotels.
To create strong customer relationship with the help of standardised hotel database
Better positioning power
They want to increase connection between rosewood properties
Create rosewood junkies
Promote cross property usage by establishing rosewood as a true brand name
Although some property enjoyed return visits of upto 40%, only 5% of the guests had stayed in more than one of
rosewoods properties
To achieve higher profitability-competitive industry
Would help the customer to build a trust on the quality of the brand and would not be reluctant to visit other hotels.

WHAT ARE THE PROS AND CONS OF MOVING FROM INDIVIDUAL

BRANDS TO A CORPORATE BRAND?

INDIVIDUAL BRANDS
PROS

Unique and distinctive properties which represented the local culture

Cost efficiency
Flexible internal management

CONS
Low brand awareness
Limits the reach of the market

CORPORATE BRANDING
PROS
Better brand recognition
High multi-property cross selling rates(5%-10% for individual and
Better customer lifetime value
Customers are able to use multiple properties

CONS
Internal resistance from owner ,guest and manager
Increasing marketing cost for re branding
Looses differentiation in the industry
Loosing employee trust

10%-15% for corporate)

WILL THE MOVE TO CORPORATE BRANDING

MAXIMIZE CUSTOMER LIFETIME VALUE?

Total number of unique guests

Average Daily Spend
Number of days average guests stay
Average gross margin per room
Average number of visits per year per guest
Average marketing expense per guest
Average new guest acquisition expense
Total number of repeat guests
of which, total number of multiproperty stay guests

Average Guest Retention Rate

Average Gross Profit per Guest

Without
With
115000
115000
750
750
2
2
32%
32%
1.2
1.3
130 138.6957
150
150
19169
24919
5750
11500

0.166687 0.216687
576
624

Without

With

Year

Gross profit per guest

6Year

107 113 120

101 1.91 6.22 4.40 Gross profit per
900 954 1.24
4
9
3 guest

Net Profit per Guest

761.
874.
615. 660. 709. 033 816. 589
-150
5 965 414
6 022
5Net Profit per Guest

0.16 0.02 0.00 0.00 0.00

668 778 463 077 012
1
7
5
1
2
9Retention Factor
0.92 0.85 0.79
0.68
592 733 383 0.73 058 0.63
6
9
2 503
3 017Discount Factor

Discount Factor

NPV

569. 94.4 15.6 2.59 0.42

907 566 470 067 873 0.07
-150
4
6
2
9
6 092NPV

116 123
103 109 1.24 0.91 130
975 3.5 5.51
1
5 4.77
163. 168. 173. 179.
154. 159. 909 826 891 107
150
5 135
1
3
1
8

142. 146. 150.

133. 137. 054 316 705 Marketing Expense
130
9 917
5
1
6 per guest

Marketing Expense per

guest

163. 168. 173. 179. Acquisition

154. 159. 909 826 891 107 expense per new
150
5 135
1
3
1
8 guest

Acquisition expense per

new guest

Retention Factor

138. 142. 147. 151. 156. 160.

695 856 142 556 103 786
7
5
2
5
2
3
681. 731. 784. 840. 900. 964.
804 508 458 857 920 875
-150
3
5
7
8
7
8

0.21 0.04 0.01 0.00 0.00

668 695 017 220 047
1
7
3
4
5
8

0.92 0.85 0.79

0.68
592 733 383 0.73 058 0.63
6
9
2 503
3 017
631. 135. 29.2 6.28 1.35 0.29
300 895 391 819 175 046
-150
3
4
3
3
8
4

WILL THE MOVE TO CORPORATE BRANDING

MAXIMIZE CUSTOMER LIFETIME VALUE?
CLTV Calculation Without Changes to Brand Strategy
Total NPV of CLTV

CLTV Calculation With New Brand Strategy

Total NPV of CLTV

Increase in CLTV per customer of new Marketing Plan

533.1014

654.3652
121.2638

Multiplied by number of Customers to obtain increase in

profit of Rosewood from new brand strategy

1394534

Divided by 32% gross margin to obtain increase in

Revenue of Rosewood from new brand strategy

4357918

THANK YOU !!