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 Taris Rate ranging from $120 to $9000.

John ScoU is a new President & CEO and

Robert Boulogne is VP of sales &marke]ng

John

Robert

Competed with hotels with Corporate branding and individually branded unique
hotels.

Introduction Contd

Rosewoods Sense of Place Philosophy Architectural details, interiors

reected 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.

Hotel Bel Air, Los Angeles

Hotel Caroline

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

Introduction Contd

1990 adver]sing was property specic 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.

Important Factors to taken into account

Corporate
Branding

Employees

Guests

Agents

Compe]]on

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 dont 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

Its a brand of dilemma dont 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

Guests Perception

Brand Rosewood means nothing.

Guests have used various proper]es but couldnt realize that
all were a part of same group
Even aier staying at the property, guests dont tend to know
the name Rosewood
Rosewood as a brand doesnt encourages me to try dierent
proper]es
I dint know un]l my travel agent men]oned it

Current Issues

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.

Probable Solutions

Through frequent-stay program

Corporate branding approach

Issues observed with Frequent Stay Programme

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
oerings such asexible check in, check out ]me,
personalized services, freedom to request a specic room,
capacity of employees to solve most unusual problem etc

Advantages of Corporate Branding:

Better Customer Life Time Value
CLV
3000
2500
2000
1500
1000
500
0

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

Advantages of Corporate Branding (Contd)

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

Issues in Corporate Branding

Internal resistance : Few Hotel Managers were inclined to

promote their own Hotel Rather than promo]ng the Rosewood

Some corporate guests didnt want to be a part of bigger

Organiza]on due to their emo]onal aUachment to a par]cular
hotel.

Scenario with an Introduction of Corporate Branding

Without Rosewood
brand Name(2003)

With Rosewood corporate

brand name

115000

115000

750

750

No. of days av guest stays

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

19169

46000

5750

11500

16.67%

40

386

407

138689580

146314155

Total Guest

115000

115000

New Guest

95831

69000

183070246

193134685

Parameters
Total no of unique guests
Av daily spend

Total no of repeat guests

(Of which: total no. of multi property stay guest)
Average Guest retention rate
Average gross profit per guest
Total Expenses

Total Revenue Generated

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

Suggestion based of Corporate Branding as a go ahead

Dont dilute individual brand persona

Subtly add Rosewood to it
Get internal teams condence
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

Thanks