Rosewood Hotels

and Resorts:Branding to increase

Customer Profitability and

life time Value

Harvard Business

School Case

• Established in 1979,

Rosewood Hotels and

Resorts is a privately held,

ultra-luxury hotel

management company

based in Dallas, Texas.

• It has 12 hotels

worldwide and 1513

rooms

• Room Tariffs ranging

from $120 to $9000

Executive

Officers as of

2003• Caroline Rose Hunt,

Honorary Chairman

• Philip Maritz, Chairman of the Board

• John Scott, President and Chief Executive Officer

• Robert Boulogne, Chief Operating Officer

• James McBride, Managing Director of The Carlyle, New York

SITUATION

ANALYSIS

SWOT Analysis.

• Strengths

• Weakness

• Opportunities

• Threats

STRENGTHS

• Unique Properties-

”Sense of Place“

• RevPAR is 17.62% ,

higher than the luxury

hotel market average

• Global Flexible data

warehouse system

• Rich history

WEAKNESS

• 84% fewer rooms than

market average in luxury

hotel industry

• Internal resistance in

changing corporate

branding strategy

• Low brand recognition

and low recall ability of

guests

• Mixed branding of

signals-inconsistent use

of rosewood logo

OPPURTUNITIES

• Growth rates and profitability

• New acquisitions

• Growing economy

• Corporate branding strategy

• Cross property usage

• Brand wide performance development

• Reward scheme for loyal customers

• Growing trend in seeking more experiential hotels

THREATS• Increase in labor costs

• External business risks

• Tough competitors

• Increasing rates of interest

• Customers are increasingly connecting with Corporate

PROBLEMRosewood brand was muted, not very well known but it was not clear what is the best corporate branding strategy without destroying the value of each individually branded hotel and loosing a customer. A new branding strategy proposing an increased customer profitability and lifetime value is needed.

Goals

• Increase Connection between Rosewood properties

• Increase cross property usage from 5% to 10%

• Building Strong Brand Equity

• Create Rosewood Junkies

Strategies

Target Market

• Customers:– Wealthy families

– Business travelers,

– Private Owners

• Collaborators: – Travel agencies

– Travel agents promoting the hotels.

– Rosewood employees also act as collaborators.

• Competition:Compare Rosewood % property growth 1996-2003 it is 15% above the average of corporate branded properties and 20% below the average of individually branded ones. This % of growth less compared to individually branded ones

Tactics• Products : Packaging

and hotel attributes include should both the name of individual hotel and corporate brand.

• Price : No big changes in pricing policy are recommended.

• Incentives

• Efficient branding

• Promotion

Revenue and Cost Analysis

Total NPV of CLTV without Corporate Brand

Total NPV of CLTV with Corporate Brand

RECOMMENDATION/IMPLEMENT

• Adopt Corporate Branding

• Strengthen Rosewood’s Brand Equity

SUMMARY

• Board Members

• Situation Analysis

• Problem faced

• Goal

• Strategy

• Tactics

• Implementation

• Created by SHAHABAS SHAMSAD, NIT

TRICHY during a marketing internship

under PROF.SAMEER MATHUR,IIM

LUCKNOW

DISCLAIMER