Rosewood Hotels and Resorts Case
ROSEWOOD HOTELS AND RESORTS CASE
Strategic issues and problems: The following report will describe and analyze the case of a private hotel management company called “Rosewood Hotels and Resorts”. Rosewood hotels have 12 distinctive hotels worldwide with a strong brand image that makes each property unique. The dilemma found in this case is whether to keep the current individual branding strategy or create a corporate branding strategy, without undercutting the distinctiveness of each hotel. To do so the following points will be covered: Recommendation on individual versus corporate branding strategies. Qualitative analysis considering pros and cons of each branding strategy Quantitative analysis estimating the impact of Rosewood’s corporate branding strategy on customer lifetime value (CLTV)
Recommendations: As we will observe in the qualitative analysis there are many disadvantages if the new strategy is implemented. However from an economic point of view we will see that implementing a new branding strategy is better for the company as the NPV per guest is higher (see quantitative analysis). Taking into account the Customer Lifetime Value Model Rosewood should implement a corporate branding strategy. However to minimize the disadvantages it would be essential to keep the name of some emblematic hotels such as “Carlyle” in order for the clients to remain loyal. These hotels can add the name “Rosewood”, to keep its clients aware that they belong to this chain.
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Qualitative analysis: The pros and cons of creating a new branding image are the followings ones: Advantages: Increase cross-selling rates (guests who stay at one of Rosewood properties to stay at some of the others) from 5-10% to 10-15%. Enter into a bigger market (luxury market), nowadays its target is a subset of the luxury market (only exclusive “collection” hotels). Increase the brand-awareness of Rosewood. High customer loyalty Every hotel will become more standardized and
Strategic issues and problems: The following report will describe and analyze the case of a private hotel management company called “Rosewood Hotels and Resorts”. Rosewood hotels have 12 distinctive hotels worldwide with a strong brand image that makes each property unique. The dilemma found in this case is whether to keep the current individual branding strategy or create a corporate branding strategy, without undercutting the distinctiveness of each hotel. To do so the following points will be covered: Recommendation on individual versus corporate branding strategies. Qualitative analysis considering pros and cons of each branding strategy Quantitative analysis estimating the impact of Rosewood’s corporate branding strategy on customer lifetime value (CLTV)
Recommendations: As we will observe in the qualitative analysis there are many disadvantages if the new strategy is implemented. However from an economic point of view we will see that implementing a new branding strategy is better for the company as the NPV per guest is higher (see quantitative analysis). Taking into account the Customer Lifetime Value Model Rosewood should implement a corporate branding strategy. However to minimize the disadvantages it would be essential to keep the name of some emblematic hotels such as “Carlyle” in order for the clients to remain loyal. These hotels can add the name “Rosewood”, to keep its clients aware that they belong to this chain.
1
Qualitative analysis: The pros and cons of creating a new branding image are the followings ones: Advantages: Increase cross-selling rates (guests who stay at one of Rosewood properties to stay at some of the others) from 5-10% to 10-15%. Enter into a bigger market (luxury market), nowadays its target is a subset of the luxury market (only exclusive “collection” hotels). Increase the brand-awareness of Rosewood. High customer loyalty Every hotel will become more standardized and