Rosewood, huh?

A private luxury hotel management company

12 hotels worldwide with 1513 roms

Initial Philosopy:Individual Brand Strategy

Convert existing iconic luxury hotels with strong brand

equity

Eg: The Carlyle, Little Dix Bay

Conceive and create next generation of

luxury hotels, thereby create brand

equity

Eg: The Mansion on Turtle Creek, Las

Ventanas al Paraiso

1990s

But then..!

Limitations of this

approach

Low Brand Recognition

Low Cross Selling

Possible Solutions

Frequent Stay/Loyalty

Program

Corporate Branding

Corporate Branding

Increases Cross

Selling

From 5-10% to 10-15 %

Problems with Branding

Marketing Expense

Around 1 million dollars

Resistance from individual

Brands

Managers and private owners

Is it worth the money?

Let the Numbers decide!

Without Rosewood Branding(2003)

With Rosewood Corporate Branding

Total number of unique guests 11500 115000

Average daily spend $750 $750

Number of days average guest stays 2 2

Average gross margin per room 32% 32%

Average number of visits per year per guest 1.2 1.3

Average marketing expense per guest $130 $138.7

Average new guest acquisition expense $150 $150

Total number of repeat guests 19169 24919

Of which: number of multi-property guests 5750 11500

Average Guest Retention rate 16.7% 21.67%

Average Gross Profit Per Guest $576 624

Total NPV of CLTV without Corporate BrandYears 0 1 2 3 4 5 6Gross profit per guest

609.50 646.07 684.83 725.92 769.48 815.65

Acquisition expense per guest

150

Marketing expense per guest

132.60 135.25 137.96 140.72 143.53 146.40

Net profit per guest

(150.00) 476.90 510.82 546.88 585.21 625.95 669.25

Retention factor 1.00 0.2167 0.047 0.01 0.002 0

Discount factor 0.93 0.86 0.79 0.74 0.68 0.63

Net Present Value (150.00) 443.52 95.19 20.31 4.33 0.85 0

Total NPV = 414.2

Total NPV of CLTV with Corporate BrandYears 0 1 2 3 4 5 6Gross profit per guest

661.44 701.13 743.19 787.79 835.05 885.16

Acquisition expense per guest

150

Marketing expense per guest

142.86 147.14 151.56 156.10 160.79 165.61

Net profit per guest (150.0) 518.58 553.98 591.64 631.68 674.27 719.55

Retention factor 1.00 0.2167 0.047 0.01 0.002 0

Discount factor 0.93 0.86 0.79 0.74 0.68 0.63

Net Present Value (150.0) 480.1 103.24 21.97 4.67 0.92 0

Total NPV = 460.9

Recommendation

• Numbers have proven; Corporate Branding is the norm of the day.

Thank You!

Disclaimer

• Created by Nevin Padiyath during a Marketing internship under Professor Sameer Mathur of IIM Lucknow.