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
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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
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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