Rosewood Hotels Hbr Case

Executive Summary

In evaluating individual versus corporate branding strategies I recommend that Rosewood Hotels & Resorts adopt a corporate branding strategy to increase CLTV from $378 to $465 per customer. I also, recommend that Rosewood not dilute the individual brand persona of the individual properties but gradually and subtly incorporate Rosewood.

Understanding a Rosewood Customer

The current Rosewood customer can be described as affluent and sophisticated. This customer comes from money and with such expects a high level of service and exclusivity. They are looking for luxury and prefer exclusive boutique hotels to chains. They desire to experience the authentic culture of their destination and look for that to be reflected in their hotel. They value that above brand loyalty. They utilize travel agents to book their travel arrangements for hassle free experience that a person of that stature is accustomed. They also rely on word of mouth for information. Tradition is valued; and return to places they have positive experiences, but not likely to repeat their business as they seek new adventures. They pick luxuries that are not main stream in all their shopping habits.

The customer derives psychological value from experiencing a unique, luxury experience that is exclusive and reflective of their status. This would diminish through corporate branding making the hotels more mainstream and less elite. Economically through both corporate branding and individual branding the customer will expect upgrades, and high end flawless customer service that is flexible and catered to their specific needs. Though through corporate branding information can be shared from one property to the next resulting in a more seamless experience. Functional value in booking will remain hassle free and booked through an agent. As a result of higher brand recognition in response to corporate branding the customer may ask for Rosewood. The individually branded customer expects the unique feel of the destination to shine through their hotel, corporate’s more unified look across all properties reduces the appeal.

Table 1 identifies losses are largely psychographic and functional. Under the corporate brand strategy there is risk of losing some of its current customer base, those who will feel alienated by the new corporate feel, there is a small subset of luxury market that singularly want unique, This is a small subset of the grander luxury market and for this reason I believe will be offset by the new customers lost, return of those lost to bigger chains, increased repeat and cross-property usage. Essentially creating “Rosewood Junkies”. Another potential risk is streamlined service across all properties. This can be both a benefit if done correctly encouraging stay at other Rosewood properties, or a detriment if one bad experience reduces the likelihood a customer will use other Rosewood properties. Reputation is powerful and word of mouth among the elite can make or break a business.