51155337 rosewood hotels resorts cltv sensitivity analysis grp 4

8/7/2019 51155337 Rosewood Hotels Resorts CLTV Sensitivity Analysis Grp 4

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Details

Total number of unique guests (a)

Average daily spend (b)

Number of days average guest stays

Total Spend per guest per stay

Average gross margin per room

Average gross profit per roomAverage number of visits per year per guest

Total Gross Profit per guest

Average marketing expense per guest (systemwide) (d)

Average new guest acquisition expense (systemwide)

Total number of repeat guests (e)

Of which: Total number of multiproperty stay guests

Cross Selling %

Average Guest Retention Rate (f)

Average Gross Profit per Guest

Revenue Growth Rate

Marketing Cost Growth rate

INDIVIDUAL BRANDING

Years

Average daily spend




Average gross profit per roomAverage number of visits per year per guest

Gross profit per guest

Acquisition expense per new guest

Marketing expense per guest

Net Profit per Guest

Retention factor

Net Cash Flow

Discount factor

Net Present Value (NPV)(g)

CORPORATE BRANDING

Years

Average daily spend




Average gross profit per room

Average number of visits per year per guest


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Gross profit per guest

Acquisition expense per new guest

Marketing expense per guest

Net Profit per Guest

Retention factor

Discount factor

Net Present Value (NPV)(g)

Assuming that Acquisition Cost is one time only

Note: The company used an 8% discount rate and assumed ma

a) For the purpose of this analysis, Rosewood treats double oc

b) The average daily spend is the total expenditure per guest

c) Twice more multi-property guests, inflating the overall num

d) Cost of marketing communication with a Rosewood corpora

e) Repeat guests were guests who, after staying once in a Ros

f) Guest retention rate: the probability that a guest comes bac

g) Net Present Value (NPV): the future stream of benefits and


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Individual Branding Corporate Branding

115,000 115,000

750 750

2 2

1,500.00 1,500.00

32% 32%

480.00 480.001.2 1.3

576.00 624.00

130.00 138.70

150.00 150.00

19,169 24919

5,750 11500

5% 10%

16.67% 21.67%

576.00 624.00

6%

3%

0 1 2 3 4

750.00 795.00 842.70 893.26 946.86

2 2 2 2 2

1,500.00 1,590.00 1,685.40 1,786.52 1,893.72

32% 32% 32% 32% 32%

480.00 508.80 539.33 571.69 605.991.2 1.2 1.2 1.2 1.2

576.00 610.56 647.19 686.03 727.19

150.00 -- -- -- --

130.00 133.90 137.92 142.05 146.32

296.00 476.66 509.28 543.97 580.87

16.67%

49.34 79.46 84.90 90.68 96.83

8%

443

0 1 2 3 4

750.00 795.00 842.70 893.26 946.86

2 2 2 2 2

1,500.00 1,590.00 1,685.40 1,786.52 1,893.72

32% 32% 32% 32% 32%

480.00 508.80 539.33 571.69 605.99

1.3 1.3 1.3 1.3 1.3


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624.00 661.44 701.13 743.19 787.79

150.00 -- -- -- --

138.70 142.86 147.14 151.56 156.10

335.30 518.58 553.98 591.64 631.68

21.67%

72.66 112.38 120.05 128.21 136.89

8%

629

rketing costs increased at a rate of 3% per year and guest revenues at a r

cupancy (i.e., John Doe and Jane Doe staying in the same room) as one gu

er day on room, food, beverage, and other services.

ber of repeat guests, 1.3 stays per guest per year, and $1,000,000 market

te brand: [(total number of guests * average cost of marketing per guest i

ewood hotel, returned to a Rosewood property the year after (the same o

k to a Rosewood hotel the following year (number of repeat guests/total n

costs converted into equivalent values today, by discounting future benef


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5 6

1,003.67 1,063.89

2 2

2,007.34 2,127.78

32% 32%

642.35 680.891.2 1.2

770.82 817.07

-- --

150.71 155.23

620.11 661.84

103.37 110.33

5 6

1,003.67 1,063.89

2 2

2,007.34 2,127.78

32% 32%

642.35 680.89

1.3 1.3


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835.05 885.16

-- --

160.79 165.61

674.27 719.55

146.11 155.93

ate of 6% per year.

st

ing expenses

2003) + $1,000,000] / total number of guests.

e or a different one). Repeat guests included multiproperty guests.

umber of guests)

its and costs using an appropriate discount rate.


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Retention CLTV (Corp)

1.20 16.67% 443 443

1.21 17.17% 453 443

1.22 17.67% 472 443

1.23 18.17% 490 443

1.24 18.67% 509 443

1.25 19.17% 529 443

1.26 19.67% 548 443

1.27 20.17% 568 443

1.28 20.67% 588 443

1.29 21.17% 609 443

1.30 21.67% 629 443

Avg No ofVisits perGuest

CLTV (Indiv)(Avg VisitsRemainsConstant at1.2)

1.2 1.21

0.00

100.00

200.00

300.00

400.00

500.00

600.00

700.00

CLTV

(in

$)

1.2 1.21

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%


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1.22 1.23 1.24 1.25 1.26 1.27 1.28 1.29 1.3

arying CLTV with Shift From Individual to Corpor

Avg No of Visits perGuest

CLTV (Corp)

CLTV (Indiv) (Avg VisitsRemains Constant at1.2)

1.22 1.23 1.24 1.25 1.26 1.27 1.28 1.29 1.3

arying Retention Rate

Retention


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Details

Total number of unique guests (a) 115,00

Average daily spend (b) 750

Number of days average guest stays 2

Total Spend per guest per stay 1,500

Average gross margin per room 32%

Average gross profit per room 480

Average number of visits per year per guest 1.2

Total Gross Profit per guest 576

Average marketing expense per guest (systemwide) (d) 130

Average new guest acquisition expense (systemwide) 150

Total number of repeat guests (e) 19,169

Of which: Total number of multiproperty stay guests 5,750

Cross Selling % 5.0%

Average Guest Retention Rate (f) 16.67%

Average Gross Profit per Guest 576

Revenue Growth Rate 6%

Marketing Cost Growth rate 3%

INDIVIDUAL BRANDING (Avg no of Visits per Guest per year =

Years 0

Gross profit per guest 576

Acquisition expense per new guest 150

Marketing expense per guest 130Net Profit per Guest 296

Retention factor 16.67%

Net Cash Flow 49

Discount factor 8%

Net Present Value (NPV)(g) 443

(Avg no of Visits per Guest per year = 1.21)

Years 0


Acquisition expense per new guest 150Marketing expense per guest 139

Net Profit per Guest 292


Net Cash Flow 50

Discount factor 8%


IndividualBranding


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Years 0



Marketing expense per guest 139



Net Cash Flow 52

Discount factor 8%



Years 0






Net Cash Flow 55

Discount factor 8%



Years 0






Net Cash Flow 57

Discount factor 8%



Years 0


Acquisition expense per new guest 150Marketing expense per guest 139



Net Cash Flow 60

Discount factor 8%


Note: The company used an 8% discount rate and assumed marketing costs


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a) For the purpose of this analysis, Rosewood treats double occupancy (i.e.,

b) The average daily spend is the total expenditure per guest per day on ro

c) Twice more multi-property guests, inflating the overall number of repeat

d) Cost of marketing communication with a Rosewood corporate brand: [(to

e) Repeat guests were guests who, after staying once in a Rosewood hotel,

f) Guest retention rate: the probability that a guest comes back to a Rosew

g) Net Present Value (NPV): the future stream of benefits and costs convert


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115,000 115,000 115,000 115,000 115,000 115,000 115,000

750 750 750 750 750 750 750

2 2 2 2 2 2 2

1,500 1,500 1,500 1,500 1,500 1,500 1,500

32% 32% 32% 32% 32% 32% 32%

480 480 480 480 480 480 480

1.21 1.22 1.23 1.24 1.25 1.26 1.27

581 586 590 595 600 605 610

139 139 139 139 139 139 139

150 150 150 150 150 150 150

19,744 20,319 20,894 21,469 22,044 22,619 23,194

6,325 6,900 7,475 8,050 8,625 9,200 9,775

5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5%

17.17% 17.67% 18.17% 18.67% 19.17% 19.67% 20.17%

581 586 590 595 600 605 610

1 2 3 4 5 6

611 647 686 727 771 817

-- -- -- -- -- --

134 138 142 146 151 155477 509 544 581 620 662

79 85 91 97 103 110

1 2 3 4 5 6

616 653 692 733 777 824

-- -- -- -- -- --143 147 152 156 161 166

473 505 540 577 616 658

81 87 93 99 106 113


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1 2 3 4 5 6

621 658 697 739 784 831

-- -- -- -- -- --

143 147 152 156 161 166

478 511 546 583 623 665

84 90 96 103 110 118

1 2 3 4 5 6

626 663 703 745 790 837

-- -- -- -- -- --

143 147 152 156 161 166

483 516 552 589 629 672

88 94 100 107 114 122

1 2 3 4 5 6

631 669 709 751 797 844

-- -- -- -- -- --

143 147 152 156 161 166

488 522 557 595 636 679

91 97 104 111 119 127

1 2 3 4 5 6

636 674 715 757 803 851

-- -- -- -- -- --143 147 152 156 161 166

493 527 563 601 642 686

95 101 108 115 123 131

increased at a rate of 3% per year and guest revenues at a ra


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John Doe and Jane Doe staying in the same room) as one guest

m, food, beverage, and other services.

guests, 1.3 stays per guest per year, and $1,000,000 marketing expens

al number of guests * average cost of marketing per guest in 2003) + $

returned to a Rosewood property the year after (the same one or a diff

od hotel the following year (number of repeat guests/total number of g

d into equivalent values today, by discounting future benefits and cos


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115,000 115,000 115,000

750 750 750

2 2 2

1,500 1,500 1,500

32% 32% 32%

480 480 480

1.28 1.29 1.3

614 619 624

139 139 139

150 150 150

23,769 24,344 24,919

10,350 10,925 11,500

9.0% 9.5% 10.0%

20.67% 21.17% 21.67%

614 619 624

CorporateBranding


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es

1,000,000] / total number of g

rent one). Repeat guests inclu

uests)

s using an appropriate discoun


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Years 0 1

Gross profit per guest 605 641

Acquisition expense per new guest 150 --

Marketing expense per guest 139 143Net Profit per Guest 316 498


Net Cash Flow 62 98

Discount factor 8%



Years 0 1


Acquisition expense per new guest 150 --Marketing expense per guest 139 143

Net Profit per Guest 321 503


Net Cash Flow 65 102

Discount factor 8%



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Years 0 1



Marketing expense per guest 139 143




Discount factor 8%



Years 0 1







Discount factor 8%


CORPORATE BRANDING (Avg no of Visits per Guest per year = 1.30)

Years 0 1







Discount factor 8%



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ests.

ed multiproperty guests.

t rate.


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2 3 4 5 6

680 720 764 809 858

-- -- -- -- --

147 152 156 161 166532 569 607 649 692

105 112 119 128 136

2 3 4 5 6

685 726 770 816 865

-- -- -- -- --147 152 156 161 166

538 574 614 655 699

108 116 124 132 141


23/24

2 3 4 5 6

690 732 776 822 872

-- -- -- -- --

147 152 156 161 166

543 580 620 661 706

112 120 128 137 146

2 3 4 5 6

696 737 782 829 878

-- -- -- -- --

147 152 156 161 166

549 586 626 668 713

116 124 132 141 151

2 3 4 5 6

701 743 788 835 885

-- -- -- -- --

147 152 156 161 166

554 592 632 674 720

120 128 137 146 156


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51155337 rosewood hotels resorts cltv sensitivity analysis grp 4

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