Comprehensive analysis of Rosewood Hotels and its depicted in this presentation.

1. Rosewood Hotels & Resorts
HARVARD BUSINESS SCHOOL

2. Company Profile
Headquartered in
Dallas, Texas
Established in 1979
by the Caroline Rose
Hunt Trust Estate

3. BACKGROUND
First hotel managed:The
Mansion on Turtle
Creek,1980
Old mansion in Dallas
rescued from demolition by
Mrs. Hunt
Company ability to creating
unique, one-of-a-kind properties
2003, Rosewood had 12 hotels
worldwide, with a total capacity of
1,513 rooms
Pricing:$120 for one of the Saudi
Arabian properties to $9,000 for a
Canadian lodge

4. Objectives of
this case
Determining issues for the
company
OBJECTIVE-1

5. OBJECTIVE-2
Determine Competition in the
specific hotels & resorts
industry

6. OBJECTIVE-3
Philosophy of Rosewood

7. OBJECTIVE-4
Strategies & Decisions
Undertaken

8. Caroline Rose Hunt: Honorary Chairman
Philip Maritz: Chairman of the board
John Scott: President and Chief Executive Officer
Robert Boulogne: Chief Operating Officer
James McBride: Managing Director of The Carlyle, New York
The Main Players

9. The Objective
Operating as a “collection” of unique properties, each with its
own name or brand,
 Unlike the corporate brand model, in which luxury tended to
follow a “Canned and Cookie cutter” approach across properties

11. OPERATIONS OF THE COMPANY

12. Fall in the number!!

13. REASONS FOR THE
FALL

14. Issue 1:
Scott recognized that the Rosewood brand had
 Low recognition and
 Brand-wide usage among guests and was an untapped asset.
ISSUES

15. Issue 2:
Emphasis on individual property brands was not working from a
number of fronts.
Guests not making the connection and Low Brand Visibility.

16. Issue 3:
Brand Positioning
• Philip Maritz questioned Rosewood’s individual branding positioning
• Intense competition in the luxury hotel segment,
• and Current brand posititioning limiting the market

17. Source: Rosewood Hotels & Resorts
Competition Analysis
High Competition!!

18. 2 groups of luxury hotels:
1. Corporate branded Ritz-Carlton, Four Seasons, St.
Regis, One&Only, and Mandarin Oriental hotels.
2. “Collections” of individually branded unique hotels, such
as Auberge, RockResorts, and Orient-Express.
The Competition

19. Better Performance than
its competitors
But other
parameters!!

20. The Philosophy
 Concept of “A Sense of Place®”
Design to Service to Programming, tailoring each property
experience to what is special about a given location,
architecture, history, and culture

21. The Strategic Journey
 Original (1990’s) collection growth strategy was two-fold
Convert existing
iconic, luxury
with strong brand
equity
Creating brand equity
in the property itself

22. (A)Majority of consumers did not know
the brand
(B)Few who did had learned the name
Rosewood from their travel agents
Insights of 2003 report from
Strategic Marketing Solutions

23. Decisions
Undertaken

24. DECISION 1:
Switching to an automated data-gathering
through its central reservation system (CRS), and
was creating one global, flexible data warehouse for
all its hotels.

25. AIM
To expand the customer
preference and profitability
program across the entire brand

26. Decision 2:
Scott and Boulogne believed
in:
Adopting a corporate branding
approach,

27. AIM
Create guest connection with Rosewood
properties
Encourage multi-property guest stays
Creating Brand’s lifetime value

28. Case Study:
AmanResorts model

29. What is AmanResorts Model?
A luxury resort hotel management company with corporate-
branded properties located in remote natural settings
Nicknamed its core followers “Aman Junkies,” prided themselves
on collecting Aman experiences
Aman resorts sold the promise of
pure, unadulterated quiet

30. A New Brand Strategy to Build
Customer Lifetime Value

31. STRATEGY PROJECTIONS
A spreadsheet model that projected Rosewood’s brand-wide
customer lifetime value (CLTV) developed, using nine
financial and operational input variables related to rooms,
guests, and marketing and acquisition costs.

32. Source: Rosewood Hotels & Resorts

33. Impact of corporate branding strategy the initial analysis & the following
working assumptions:
1. The number of multi-property guest stays was anticipated to double to 10%
from the 5% rate the company experienced during the previous year, raising
the average number of visits per year per guest from 1.2 to 1.3, inflating the
total number of repeat guests
2. The overall total number of unique guests was kept constant at 115,000.
3. A marketing and operations investment of $1 million per year necessary to
implement the corporate branding strategy.

34. Scott had high hopes for Rosewood:
“I want to emulate the AmanResorts
model and develop ‘Rosewood
junkies’ who will seek out Rosewood
properties exclusively.”

36. Rosewood’s Brand-wide Customer Lifetime Value
Spreadsheet Model
Without Rosewood Branding With Rosewood Corporate Branding
Total number of unique guests 115,000 115,000
Average daily spend $750 $750
Number of days average guest stays 2 2
Average gross margin per room 32% 32%
Average number of visits per year per guest 1.2 1.3
Average marketing expense per guest $130 To be calculated
Average new guest acquisition expense $150 $150
Total number of repeat guests e 19,169 To be calculated
Total number of multiproperty stay guests 5,750 To be calculated
Average Guest Retention Rate 16.67% To be calculated

37. THE SPREADSHEET SHOWS THE GROWTH OF
THE BRAND THROUGH THE NEW STRATEGY!!