...Memorandum To: From: Cory Castle Date: September 27, 2015 Re: Rosewood Hotels and Resorts CEO John Scott’s recommendation to Rosewood Hotels & Resorts (Rosewood) board of directors is to adopt the corporate branding strategy to boost company growth through increased cross-selling rates across its line of luxury hotels around the world. The Customer Lifetime Value (CLTV) for the next 6 years as referenced in the “Rosewood Hotels & Resorts: Customer Lifetime Value (CLTV) Analysis”, Rosewood is projected to see an increase in revenue of approximately $29.6 Million with a corporate brand strategy. The result was derived from $82.60 per customer CLTV in increased marketing costs, times the number of projected repeat customers (115,000), which was $9,498,542 in increased profit. This profit divided by 32% gross margin which resulted in $29,682,943 of increased revenue over a 6 year time period. This projected increase in revenue substantiates Scott’s initiatives. Currently, Rosewood is operating under an individual hotel branding concept, building on its one-of-a-kind, luxury hotel concept of “A Sense of Place”. Rosewood has become known for its ability to foster an environment detailed to the individual consumer. The change to the Rosewood corporate brand is projected to help customers associate the suite of luxury hotels under the Rosewood name and encourage them to stay at other hotels worldwide within the conglomerate. Of the 40% of customers who had...
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...Rosewood Hotels: Branding to Increase Customer Profitability and Lifetime Value Rosewood Hotels and Resorts have developed a reputation with a portfolio of luxury hotels. The company’s portfolio of properties adheres to Rosewood’s "Sense of Place" philosophy. This allows each hotel to produce a unique, one-of-a-kind property based on each individual property’s location. Rosewood prides itself on avoiding the corporate brand model or “canned and cookie cutter” approach within all its properties. Growth in the luxury hotel market has been on the decline. Unfortunately because of the individual branding of the different Rosewood Hotels, cross selling rates between Rosewood Hotels was lower in comparison to their corporate brand model competitors. Corporate branded hotels have seen a 10-15% cross property usage rate. Rosewood Hotels only has 5-10% cross property usage rate. In order improve upon the cross-property usage rate, Rosewood Hotels is considering changing their branding strategy to more of a unifying theme to bring more customers back to its hotels. However the Rosewood brand name is relatively unknown. By creating a corporate brand name across all of the properties, Rosewood would run the risk of losing the distinctiveness of each individual hotel. Ultimately, Rosewood Hotels has to make a decision to proceed with corporate branding or to continue emphasis on individual property brands. Recommendations: To offer the best recommendation as to which strategy...
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...Rosewood, which was released in 1997 by John Singleton, is a film that is based on an actual incident, an American tragedy that everyone involved tried to forget or deny. In 1923 in the state of Florida a black town, Rosewood, was burnt down to ashes. Rosewood was a place that the blacks owned and paid taxes on; it was a place that they called home. It was burnt down all because of a lie made by a white woman saying she was raped by a black man, or in her words a “nigger”. Although that is the supposed reason that the white men started harassing and killing the blacks, we all can see that it was because of racism. Many forms of racism are shown throughout the movie through words and actions made by the whites and blacks against each other. The blacks were called “niggers” by the whites, and the whites were called “crackers” by the blacks. Rosewood, showed historical accuracy in several parts of the movie. In the movie Singleton painted a picture of white people that is far from simplistic. He shows us the problems of murderous social relations where Fannie Taylor was afraid that her husband would beat her up when he discovered that she had been beaten by her white lover, she relied on the whole system of white supremacy to save her from the abuse of her husband. He shows us the property relations where the white men of the town are primed for a lynch mob mentality when Mann (one of the characters) outbids the white shopkeeper John Wright for a plot of land. Singleton then...
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...American History X is featured film directed by Tony Kaye and takes place in Venice California in 1998. The audience for this movie is for a history class learning about segregation or for a political science course or simply anyone who wants to watch a drama film. The movie was intended to show the segregation and discrimination between colored people, immigrants and white people. Some of the phrases said in the film were blunt and obscure but in the era the movie took place at racism was performed out in public everywhere. There was a major separation between the colored and white people specifically in this movie. This film is realistic because up to this day this world still deals with racism. It has stopped in areas such as public schools, home communities and drinking out of the same water fountain. In the film the white American’s praised for Hitler as if he was a God or someone of high recognition. Many of the characters represented him by carrying a tattoo of the swastika symbol. The entire movie had a racial hatred towards black Americans. The same issues one deals with today are the same issues dealt with in American History X. Some of the movie scenes in the film are quite disturbing especially in the beginning when the main character Deryek abuses a young black man in the front of his home. It makes one wonder why are there people with such hatred towards others simply for the color of one’s skin, it is not fair. The era in which the movie takes place fits perfectly...
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...2087 JUNE 15, 2007 CHEKITAN S. DEV LAURE MOUGEOT STROOCK Rosewood Hotels & Resorts: Branding to Increase Customer Profitability and Lifetime Value Introduction For nearly 25 years, Rosewood Hotels & Resorts (Rosewood), a private hotel management company, sought to build a global reputation with iconic luxury hotels such as The Mansion on Turtle Creek in Dallas and The Carlyle in New York—trophy properties so distinctive, each could thrive on its own name, without any “corporate” identification (see Exhibit 1 for brand history). The Rosewood brand was muted, unmentioned in advertising, and known mainly to hotel professionals. However, in early 2004, to boost the company’s growth, John Scott, Rosewood’s new president and CEO, and Robert Boulogne, vice president of sales and marketing, were considering a new brand strategy. As Boulogne recalled: We thought the time was right to establish Rosewood as a true brand incorporated into the name of each hotel and prominently displayed in all communications for and at our properties. This would help provide us with a platform for encouraging guests who stay at one of our properties to stay at some of the others. But, they wondered how far they could push this branding strategy without undercutting the distinctiveness of each individually branded hotel. Company Profile and Background Headquartered in Dallas, Texas, Rosewood Hotels & Resorts, L.L.C, was a privately held company, established in 1979 by the Caroline...
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...1. Summary of the Key Facts of the Case Rosewood Hotels and Resorts is a private luxury hotel management company established in 1979, headquartered in Dallas, Texas. The first hotel managed by the company was The Mansion on Turtle Creek, opened in 1980. As of 2003 the Rosewood had 12 hotels worldwide, with a total capacity of 1,513 rooms, with a nightly rate varying between $120 -$9,000. Rosewood competed with luxury corporate branded hotels such as Ritz-Carlton and Four Seasons but unlike them, Rosewood operated unique properties, each with its own name or brand. Each one of such hotels reflected local character and culture defining Rosewood’s “Sense of Place” philosophy. This meant that each one of the properties captured what was unique about the given location; architectural details, culinary concepts, interiors, etc. The Rosewood branding was soft and meant to be complementary; the Rosewood logo appeared discreetly on low-profile amenities such as clothes hangers and stationary. Hotel greetings did not mention the Rosewood name. 2. Define the branding options and discuss the nonfinancial pros/cons of each. Address the pros and cons and how you will deal with them. Rosewood brand had low recognition and brand-wide usage among guests. While guests were seeking a unique Rosewood property experience and product, they were not making the connection between Rosewood properties and were increasingly identifying with other strong hotel brands. Guest data revealed that although...
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...1920s in Rosewood The events that took place in Rosewood, Florida, were to say the least horrifying and fueled by hate. The first week of January 1923, a mob of whites invaded a small black town and massacred 27 people total, to include women and children. The “reason” behind this violent tirade was due to a woman by the name of Fannie Taylor telling her neighbor that a black man broke into her home and assaulted her; when in fact, she was having an extramarital affair and her lover assaulted her. That sparked the massacre of the people of Rosewood. Mobs of white men went looking for a black man that had allegedly escaped from a chain gang. They were unsuccessful in their efforts to locate him and thus, ensued the most horrendous massacre of black people in the history of the United States. The mob ended up burning down the entire village and displaced all the surviving victims of Rosewood. I am conflicted with the idea of calling the event that took place in Rosewood, genocide. The reason being is because mobs of white men were coming from all over, not just the neighboring towns in search of one black man. While they ended up killing around 27 people (that number has not been verified, however reports would suggest that it was roughly around that), not including the one they set out for, one would have to speculate that while in their travels they had to have come across another black town and/or black people. Were black people killed along the way to Rosewood? History...
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...SUMMARY Rosewood Hotels & Resorts (Rosewood) was a group of private iconic luxury hotels without any corporate branding in 2004. To boost the company’s growth, the then CEO and Vice President decided to bring about corporate branding of Rosewood hotels but also wanted to maintain its distinctiveness of each individually branded hotel. CURRENT SCENARIO As of 2003, Rosewood had 12 hotels worldwide with a total capacity of 1513 rooms. The nightly rates ranged from $120 for one of the Saudi Arabian properties to $900 for a Canadian lodge. Rosewood was known for its ability to enhance its property’s value by being unique and differentiated from the regular chain of hotels. But on the competitive front they did compete with corporate branded hotels like Four Seasons, Ritz-Carlton, St. Regis, One & Only and Mandarin Oriental Hotels. And they also competed with collections of individually branded hotels like Auberge, Rock Resorts and Orient Express. Rosewood had continued to brand itself as an individual collection as it wanted to support its core value of “Sense of Place”, where each hotel exhibited its local character, culture and design. The individual hotel names were more prominent than the Rosewood brand itself. In April 2003, John Scott was taking over the CEO position in Rosewood, realized the limitations of individual branding. He realized that while the guests sought the unique Rosewood property experience, they didn’t make connections to other Rosewood properties...
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...ROSEWOOD HOTELS & RESORTS: CUSTOMER LIFETIME VALUE (CLTV) ANALYSIS Inputs Without Rosewood Branding (2003) With Rosewood Corporate Branding Sourcce Total Number of Unique Guests 115,000 115,000 Exhibit 8 Average Daily Spend $750.00 $750.00 growing at 6% Exhibit 8 Number of Days Average Guest Stays per Stay 2.0 2.0 Exhibit 8 Average Gross Margin per Room 32% 32% Exhibit 8 Average Number of Visits per Year per Guest 1.2 1.3 Exhibit 8 Average Marketing Expense per Guest (system-wide) $130.00 $138.70 growing at 3% Exhibit 8 Average New Guest Acquisition Expense (system-wide) $150.00 $150.00 Exhibit 8 Total Number of Repeat Guests 19,169 24,919 of which: Total Number of Multi-property Stay Guests 5,750 11500 Additional Costs Required per annum $1,000,000 Page 5 Discount Rate 8% 8% Exhibit 8 Average Guest Retention Rate 16.67% 21.67% CLTV Calculation With No Changes to Brand Strategy Year 2003 2004 2005 2006 2007 2008 2009 Number of Nights per Stay 2.0 2.0 2.0 2.0 2.0 2.0 Number of Stays per guest (assuming they are retained) 1.2 1.2 1.2 1.2 1.2 1.2 Revenue Per Night $795.00 $842.70 $893.26 $946.86 $1,003.67 $1,063.89 Revenue per Customer $1,908.00 $2,022.48 $2,143.83 $2,272.46 $2,408.81 $2,553.33 Gross Profit per Customer $610.56 $647.19 $686.03 $727.19 $770.82 $817.07 Less Cost to Acquire Customer...
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...Rosewood Hotels & Resorts Case Study Background The Rosewood Hotels & Resorts has been in business for close to 25 years. It operates in the luxury hotel segment, with a focus on one-of-a-kind hotels. Each hotel reflects the local culture and character of its location. Up to this point it has allowed properties to thrive on their own with very little corporate identity. However, management feels there is an opportunity for growth in the market and is considering a new brand strategy; one that would establish the Rosewood brand and incorporate it into the name of each property as well as introduce more Rosewood branded items in the hotels. It needs to present its strategy to the Board of Directors and is questioning how far it can push the branding without hurting the individual identities of the properties. Industry There are two distinct groups in the luxury hotel industry, the “Collections” of individual properties such as Auberge, RockResorts, and Orient-Express, and the Corporate Branded hotels such as the Ritz-Carlton and Four Seasons. Rosewood operates in the “Collections” group. It built its concept around “A Sense of Place®”, which is meant to reflect how each property captures what is unique about its location. This is fairly typical of the “Collections” brand model, where companies focus branding and marketing on individual properties, with the overall corporate brand relatively muted in the background. The Corporate Branded hotels focus heavily...
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...Rosewood Case Analysis For Rosewood Hotels to successfully move from the “canned and cookie cutter” approach of individual branding to a collective strategy of corporate branding, first the pros and cons have tobe weighed and measured. From the research conducted by Rosewood, the most obvious andimmediate pro to a corporate branding strategy is the projected increase in multiproperty stayguests from 5% to 10%. This has the potential to not only increase revenues but also brandawareness, recognition and word of mouth referrals.A full complement of pros and cons to converting to a corporate brand strategy for Rosewood isoutlined in the table below: Pros Cons Increased brandwide usage “Canned and cookie cutter” approach Increased brand recognition No “sense of place” philo sophyConnection amongst properties Loss of uniquenessGood positioning for competition Less differentiationIncreased market/share Potential loss of current brand equityIncreased brand awareness Loss of discretionPromotion of cross-property usage Resistance to change (guests and management)Increased return visits Increased marketing costsBrand loyalty – less property specific Competition tougher among corporate brandedhotelsIncreased revenues Change in the corporate culture is challengingBuilding customer lifetime values Overall customer lifetime value is higher with corporate branding than without, as demonstratedin Exhibit A. Without corporate branding, overall net present value totals $378.49...
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...Rosewood Hotel was founded in 1979 and was known for converting existing hotels into distinct, luxurious hotel settings. Each location is designed to reflect a unique culture and atmosphere by creating an exclusive experience at each property. Every hotel is individually branded by its hotel name rather than by its corporate name. This strategy has worked well for many years as shown by the results of a prominent reputation and a specific customer market. Now that the luxury hotel market is becoming quite crowded, the new CEO/President and Vice President of Sales and Marketing, John Scott and Robert Boulogne, are finding it more difficult to compete with corporate branding such as the Ritz Carlton and the Four Seasons hotel. John and Robert are considering transforming the customary strategy of individual branding into corporate branding by incorporating Rosewood’s brand into each individual property. Completing this transformation will create several positive and of course negative factors that will need careful consideration. Over the past 25 years Rosewood Hotels has built for itself a portfolio of some of the most iconic luxury hotels in the business. Every one of these hotels features architecture, interiors, and culinary concepts that reflect the local character and culture. This is defined as Rosewood’s “Sense of Place” philosophy. This is what has differentiated Rosewood from its competitors in the luxury hotel business. Leveraging these individual property brands...
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...ROSEWOOD REPORT 1. REVIEW KEY FACTS. Rosewood Hotels and Resorts (Rosewood) is a private hotel management company. Brand Rosewood is only known among hotel professionals. Rosewood differs from its completion by giving uniqueness to its hotels. Rosewood hotels carry their own brand. Rosewood hotels are unique, each hotel is one of its kinds, and they are creative and flexible. Each hotel’s interior, exterior and menu reflect the local culture and define the local philosophy. Rosewood growth strategy: 1. Re-launch and re-position an existing luxury hotel which has a strong brand name by providing professional management 2. Help developers build luxury hotel and create brand equity in the property. Brand Rosewood is never marketed, and is not popular in market. Many customers don’t know the name rosewood some knew through the travel agent. Individual property was stressed not the brand name. Rosewood always marketed the hotel by the property name. Rosewood’s management has been considering new branding strategy. Instead of branding hotels locally, rosewood is considering to go with corporate branding with all its hotels. From the data analysis 40% of the customers enjoyed return visit but only 5% stayed in more than one of Rosewood’s properties. By branding Rosewood ought to improve cross property usage and build a strong brand name among customers. 2. DEFINE THE BRANDING OPTIONS AND DISCUSS THE NONFINANCIAL PROS/CONS OF EACH. ADDRESS THE PROS AND CONS AND...
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...questions and the spreadsheet in the corresponding group link included in the assignment drop box. The group submission will be graded according to the group case rubric. Rosewood Hotels & Resorts 1. What would you recommend to Rosewood Hotels & Resorts? In your answer include the following: • Provide 3 arguments that would support your decision. • Describe how you would implement your recommendation. Our recommendation to Rosewood would be to implement the Corporate Branding Strategy for its portfolio. • The Corporate Branding Strategy increases the number of stays per guest, which in turn, increases the top line revenues generated with the number of nights per stay remaining constant under both scenarios. With a gross profit margin of 32%; this translates to over 400k in Gross profit (before marketing costs). • Their retention rate would also increase 5 percentage points by providing a loyalty program their guests can associate with. This increase reduces the overall marketing dollars needed to attract “new” guests and use those resources towards the corporate program. The corporate branding increases the number of visits from 1.2 to 1.3 per year per guest. This raises the number of repeat guests from 19,169 to 24,919. As an individual property brand, the Rosewood brand had...
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...Rosewood has been a successful hotel company built on a reputation of luxury and the “uniqueness” of the location of the hotel. Despite their success, there are Trustees on the Board who believe that Rosewood is not harnessing the power of their brand. Consequently, they are considering undergoing a corporate branding initiative to improve brand recognition, in order to promote repeat guests, and to cross-sell usage of properties. In order to determine whether this initiative is worthwhile and to provide information for the Board to make a decision, both John Scott and Robert Boulogne would like to calculate the customer lifetime value (CLTV) as a part of the information to provide for the Board of Directors’ meeting. Furthermore, at an estimated operations investment of $1 million per year, not only does this decision carry large monetary considerations, it would also be a complete change in direction for the company in terms of its marketing strategy. John Scott was elected by the Board to the CEO position to take Rosewood into a new direction. Rosewood was suffering from low brand recognition from their guests and oftentimes, some guests were not aware that they were staying a Rosewood hotel. Although some properties experienced 40% of returning guests, only 5% stayed at another Rosewood property, compared to corporately branded hotels this was slightly low since corporately branded hotels experienced 10-15% return guests across the brand. Scott hoped to emulate...
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