Raman  Dhiman  INDIAN  INSTITUTE  OF  MANAGEMENT(IIM),  SHILLONG  

Some of the Rosewood properties across the world

Introduction

•  A   private   5   star   hotel   management   company   with   luxury   iconic   hotels  

headquartered  in  Dallas,  Texas  

•  It  has  12  hotel  world  wide  with  capacity  of  1513  rooms  

•  Room  Tariffs  Rate  ranging  from  $120  to  $9000.  

•  John  ScoU  is  a  new  President  &  CEO  and    

•  Robert  Boulogne  is  VP  of  sales  &marke]ng  

•  Competed  with  hotels  with  Corporate  branding  and  individually  branded  unique  

hotels.  

John Robert

•  Rosewood’s  “Sense  of  Place”  Philosophy  –  Architectural  details,  interiors  

reflected  the  local  character  and  culture.  

•  Two  strategies  u]lized  by  Rosewood  in  opera]ng  its  proper]es:  

I.  Reposi]oning  Exis]ng  hotels  with  strong  brand  equity  with  the  professional  

management.  

 

 

II.  Create  new  genera]on  hotels  having  strong  brand  equity  in  the  property  itself.  

Introduction Contd…

Hotel Bel Air, Los Angeles Hotel Caroline

•  1990  adver]sing  was  property  specific  and  by  early  

2000  Rosewood  adver]sing  began  to  feature  in  all  

Rosewood  proper]es,  but  secondary  to  hotel  logo.  

•  Issue  came  in  2003  when  it  realized  that  Rosewood  

had  low  recogni]on    and  brand  wide  usage  among  

guest  was  an  untapped  asset.  

Introduction Contd…

Important Factors to taken into account…

Compe]]on  

Guests  

Employees  

Agen

ts  

Corporate    Branding  

External Competition…

•  Compe]ng   with   known   chains   and   individually   branded  proper]es,  to  name  few:  

•  Four  Seasons  with  58  proper]es  

•  Ritz-­‐Carlton  –  52  proper]es  

•  Fairmont  –  46  proper]es  

•  Orient  express  

•  Rocco  Forte  etc.    

 

Agents Perception

o  I  book  the  hotel  and  not  the  Rosewood  

o  Brand  is  not  as  important  as  the  hotels  &  resorts  

o  The  brand  is  not  as  strong  as  it  was  in  its  past  

o  Known  only  by  individual  hotels  &  resorts    

o  Clients  don’t  come  asking  for  Rosewood  as  a  Brand  

o  Clients  know  Rosewood  only  because  I  educate  them  on  it  

o  We   have   to   drive   understanding   of   Rosewood.   Once   they  understand  what  Rosewood  is,  it  does  mean  something  

�     

Employees’ Perception

•  It’s   a   brand   of   dilemma   –   don’t   see   great   opportunity,   few  business  opportunity  

•  Secret  club  –  known  by  some  guests  who  go  and  the  industry  

•  Very  low  awareness.  Those  who  know  are  past  guests  

Guest’s Perception

•  Brand  Rosewood  means  nothing.  

•  Guests  have  used  various  proper]es  but  couldn’t  realize  that  all  were  a  part  of  same  group  

•  Even  aier  staying  at  the  property,  guests  don’t  tend  to  know  the  name  Rosewood  

•  Rosewood  as  a  brand  doesn’t  encourages  me  to  try  different  proper]es  

•  I  dint  know  un]l  my  travel  agent  men]oned  it  

Aier  switching  to  automated  data  gathering  through  CRS,  

consolidated  guest  data    revealed  that  -­‐    

•  5%  mul]  property  return  visit  while  corporate  branded  hotels  

enjoyed  10%  -­‐15%    cross  property  usage  rate.  

•  Rosewood  was  at  the  low  end  of  the  scale  and  there  were  an  

opportunity  for  increasing  cross-­‐property  usage.  

Current Issues

•  Through  frequent-­‐stay  program  

•  Corporate  branding  approach  

Probable Solutions

•  This  type  of  program  had  been  successful  only  for  large  mul]  

segment  operators  with  broad  geographic  distribu]on.  

•  Loyalty  through  these  type  of  program  was  fostered  by  

offerings  such  as—flexible  check  in,  check  out  ]me,  

personalized  services,  freedom  to  request  a  specific  room,  

capacity  of  employees  to  solve  most  unusual  problem  etc…  

Issues observed with Frequent Stay Programme

2003   2004   2005   2006   2007   2008   2009  CLV  without  branding   317   640   966   1296   1628   1963   2299  CLV  with  branding   364   731   1102   1475   1850   2226   2603  

0  

500  

1000  

1500  

2000  

2500  

3000  

CLV  

Advantages of Corporate Branding: Better Customer Life Time Value

•  Collec]ve  experience    

•  Consistent  service  –  in  all  aspects  

•  Encourage  guests  to  use  more  than  one  property  

•  BeUer  brand  recogni]on    

•  High  customer  loyalty  

•  As  per  the  survey,  Individual  brand  or  collec]on  hotels  had  5%  to  10%   cross   selling   rates   while   corporate   branded   hotels   enjoyed  10%  to  15%  cross  property  usage  rates  

Advantages of Corporate Branding (Contd…)

•  Internal  resistance  :  Few  Hotel  Managers  were  inclined  to  promote  their  own  Hotel  Rather  than  promo]ng  the  Rosewood  

•  Some  corporate  guests  didn’t  want  to  be  a  part  of  bigger  Organiza]on  due  to  their  emo]onal  aUachment  to  a  par]cular  hotel.  

Issues in Corporate Branding

Parameters Without Rosewood brand Name(2003)

With Rosewood corporate brand name

Total no of unique guests 115000 115000 Av daily spend 750 750 No. of days av guest stays 2 2 Av gross margin per room 32% 32% Av no. of visits per year per guest 1.2 1.3 Av. Mktg. expense per guest (system wide) 130 139

Av new guest acquisition expense (system wide) 150 150 Total no of repeat guests 19169 46000

(Of which: total no. of multi property stay guest) 5750 11500 Average Guest retention rate 16.67% 40 Average gross profit per guest 386 407 Total Expenses 138689580 146314155

Total Guest 115000 115000 New Guest 95831 69000

Total Revenue Generated 183070246 193134685

Scenario with an Introduction of Corporate Branding

Corporate Branding proves out to be profitable vis-à-vis Frequest Stay programme

•  Don’t  dilute  individual  brand  persona  

•  Subtly  add  Rosewood  to  it  

•  Get  internal  teams  confidence    

•  Show  them  a  bigger  picture  

•  Incen]vize  trade  and  ask  them  to  push  a  brand  

•  PR  can  do  wonders  

•  Build  a  Rosewood  membership  plan  

•  Tie  up  with  travel  agencies/tour  operators  etc  

Suggestion based of Corporate Branding as a go ahead

Thanks