Hotel Case Study

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

Question 1:  Why is Rosewood considering a new brand strategy?

Rosewood owns and operates a worldwide group of luxury hotels that are uniquely and independently branded.  The company has been successful in attracting customers within a small niche market defined by boutique hotel enthusiasts, but would like to continue to grow through both market expansion and most importantly, by growing repeat customer business across it's various brands.  Competitive hotels, particularly larger chains that are branded at the corporate level have enjoyed roughly two times as many repeat, multi-location customer visits as Rosewood, largely because customers are unaware of Rosewood's other hotels.  Rosewood's CEO, VP of Sales & Marketing, and Chairman of the Board all believe that while the individual branding of their hotels appeals to it's current customers, the lack of a single well-known brand image limits opportunity for cross-selling across the various Rosewood properties and limits overall market opportunity.  They believe that focusing on Rosewood corporate brand will increase customer awareness, clarify its competitive positioning, and entice customers to stay at multiple Rosewood locations, thereby improving profitability and "lifetime value" of their customer base.

An important factor in Rosewood's plan is the implementation of a new central reservation system, which will allow them to capture customer information from all locations and promote "repeat" visits at multiple locations within the new brand.  Data indicated that they might be able to increase cross property usage rates from their historical levels of 5-10% to 10-15%.

What are the pros & cons of moving from individual brands to a single corporate brand?

"Pros" include cross-selling and marketing, a potential increase in the total addressable market (from boutique hotel niche to broader luxury hotel segment),...