Rosewood

Executive Summary

We recommend that Rosewood go ahead with Corporate Branding as it holds the potential of increasing customer lifetime value substantially. However, we suggest, the company make the move in subtly so as to unify their properties without diluting their individual image.

Understanding a Rosewood Customer

The appropriate bases to define the customers Rosewood caters to are:

1) Those who seek a unique experience

2) Those who are exploring specific geographies, not traveling for any other reason

The most apt descriptors to describe the current Rosewood customer segment are:

1) Psychographics – This is the segment of customers who opt for ultra-luxury vacations and refined, sophisticated experiences.

2) This is the segment of customers who are vacationing and are out to savor the local character of a place.

The value that Rosewood customers derive from their hotel experience is multidimensional. They customers pride themselves in being loyalists of an exclusive experience that only Rosewood provides. They value the attention to detail and personalized service that Rosewood has distinguished itself in providing. Rosewood has the distinction of preserving the natural character of the property it revamps (or imbibing it in a new property), and thus succeeds in providing a unique value proposition to the guests who chose their properties. The benefits of staying at one of these properties is that the stay gives them a flavor of the local character and hence, the stay is an extension of their vacation, not separate from it. Rosewood customers know the luxury they are seeking and this makes it worthwhile to pay the higher charges Rosewood demands. This is obvious from the data which indicates that Rosewood enjoys the highest, and growing RevPAR in the Luxury Hotel Segment.

If Rosewood adopts a corporate brand strategy, it’s customer base would expand from the sophisticated vacationers to a wider segment that valued corporate branded luxury. Customers who would then choose Rosewood are expected to be those who are drawn by a more consistent service structure. These customers will most likely be drawn to Rosewood properties as a result of greater brand recognition, created by their stay at one of the properties. This, in turn, is expected to boost cross-property usage rates for Rosewood. In functional terms, these customers stand to benefit from the advanced customer profile generation that Rosewood has undertaken.

A potential risk that Rosewood might be staring in the face is a dilution of its customer base, i.e. alienation of those loyalists who might perceive that Corporate Branding would