Rosewood Case Study

Rosewood Case Analysis

For Rosewood Hotels to successfully move from the "canned and cookie cutter" approach of individual branding to a collective strategy of corporate branding, first the pros and cons have to be weighed and measured. From the research conducted by Rosewood, the most obvious and immediate pro to a corporate branding strategy is the projected increase in multiproperty stay guests from 5% to 10%. This has the potential to not only increase revenues but also brand awareness, recognition and word of mouth referrals.

A full complement of pros and cons to converting to a corporate brand strategy for Rosewood is outlined in the table below:

Pros Cons

Increased brandwide usage "Canned and cookie cutter" approach

Increased brand recognition No "sense of place" philosophy

Connection amongst properties Loss of uniqueness

Good positioning for competition Less differentiation

Increased market/share Potential loss of current brand equity

Increased brand awareness Loss of discretion

Promotion of cross-property usage Resistance to change (guests and management)

Increased return visits Increased marketing costs

Brand loyalty – less property specific Competition tougher among corporate branded hotels

Increased revenues Change in the corporate culture is challenging

Building customer lifetime values

Overall customer lifetime value is higher with corporate branding than without, as demonstrated in Exhibit A. Without corporate branding, overall net present value totals $378.49 per guest while with branding that number jumps to $461.09. The average gross profit, based on repeat guests, is $2,702,500.00 without branding and $5,305,000.00 with corporate branding.

Based on the calculations, as well as the overall pros and cons, I believe that Rosewood should definitely move from individual brands to a corporate brand. That being said, the company currently has some powerhouse locations under its overall corporate climate, such as the flagship location, The Mansion on Turtle Creek in Dallas and also The Carlyle in New York. So as not to lose any current brand equity in those properties, and also to appease the management of those locations who are probably more resistant to the change to corporate branding than any other locations, I would recommend a modified corporate umbrella plan using a combination of new and existing brand elements. Rather than renaming The Carlyle to The Rosewood Carlyle, I would