“Rosewood Hotels & Resorts: Branding to Increase Customer Profitability and Lifetime Value”

1. Problem Statement

The private hotel management company, Rosewood Hotels & Resorts (RW) had built a remarkable global reputation with its portfolio of 12 iconic luxury hotels. Every hotel is its own brand and the Rosewood brand is not aggressively promoted to the customers, thus the brand awareness for the Rosewood brand is low [Exhibit 7]. With the new CEO and president, Joe Scott, and the vice president of marketing and sales, Robert Boulogne, new plans for growth of RW were considered. As a potential boost, the idea of a corporate branding strategy was developed. Not by accident, since the new management’s background included work experience in successful corporate branded hotels like the Four Season’s [Exhibit 2].

Moreover, the management has drawn on a survey saying that corporate branding increases the multiproperty cross-selling-rate from 5%, which is the industry standard for individual branded hotels, to 10-15% for corporate branded hotels [page 4]. Indeed, corporate branding would need an extra $1,000,000 investment in marketing every year. Moreover, the new strategy would displease some of the co-op’s, who feel an emotional bond with the individual branded hotels, and who are not in favour of a change in the brand name to Rosewood. [page 4] Therefore, Scott and his team have to decide whether to keep its strategy as:

1. A “collection” of individually branded unique hotels or

2. To transform the individual hotels to a chain of corporate branded hotels

2. Alternative Solutions:

Corporate Branding - Positives and Negatives:

+ 1. Expected higher profit

From Appendix 1 it can be derived that with the corporate branding strategy an increase in profit of $ 46,767,090 can be achieved. The approach for this result is that with corporate branding a guest is more likely to return to the same hotel brand – and this rate is 10% compared to 5% when the hotel is branded individually.

+ 2. Standardized Service: “Rosewood Junkies”

Based on the...