Premium Essay

Rosewood Case

In: Business and Management

Submitted By alilemiel
Words 669
Pages 3
ROSEWOOD HOTELS & RESORTS: CUSTOMER LIFETIME VALUE (CLTV) ANALYSIS
Inputs
Without Rosewood Branding (2003) With Rosewood Corporate Branding Sourcce
Total Number of Unique Guests 115,000 115,000 Exhibit 8
Average Daily Spend $750.00 $750.00 growing at 6% Exhibit 8
Number of Days Average Guest Stays per Stay 2.0 2.0 Exhibit 8
Average Gross Margin per Room 32% 32% Exhibit 8
Average Number of Visits per Year per Guest 1.2 1.3 Exhibit 8
Average Marketing Expense per Guest (system-wide) $130.00 $138.70 growing at 3% Exhibit 8
Average New Guest Acquisition Expense (system-wide) $150.00 $150.00 Exhibit 8
Total Number of Repeat Guests 19,169 24,919 of which: Total Number of Multi-property Stay Guests 5,750 11500
Additional Costs Required per annum $1,000,000 Page 5
Discount Rate 8% 8% Exhibit 8
Average Guest Retention Rate 16.67% 21.67%

CLTV Calculation With No Changes to Brand Strategy
Year 2003 2004 2005 2006 2007 2008 2009
Number of Nights per Stay 2.0 2.0 2.0 2.0 2.0 2.0
Number of Stays per guest (assuming they are retained) 1.2 1.2 1.2 1.2 1.2 1.2
Revenue Per Night $795.00 $842.70 $893.26 $946.86 $1,003.67 $1,063.89
Revenue per Customer $1,908.00 $2,022.48 $2,143.83 $2,272.46 $2,408.81 $2,553.33
Gross Profit per Customer $610.56 $647.19 $686.03 $727.19 $770.82 $817.07
Less Cost to Acquire Customer ($150.00)
Less Annual Marketing Cost per Customer ($133.90) ($137.92) ($142.05) ($146.32) ($150.71) ($155.23)
Cash Flow from Customer if Retained ($150.00) $476.66 $509.28 $543.97 $580.87 $620.11 $661.84 Probability of Being Retained 1.00 1.00 0.17 0.03 0.00 0.00 0.00
Expected Cash Flow from Customer ($150.00) $476.66 $84.90 $15.12 $2.69 $0.48…...

Similar Documents

Free Essay

Case Rosewood

...  MANUAL DEL PARTICIPANTE    Jean‐Claude Larréché  Precedido por el Profesor de Mercadeo de  INSEAD Alfred H. Heineken    Hubert Gatignon  Precedido el Profesor de Administración de Negocios y Profesor de Mercadeo de   INSEAD Claude Janssen    Rémi Triolet  Socio, Director de I&D de  STRATX                              Copyright © StratX  2011‐02‐09  1  SOBRE ESTE MANUAL    Editor: StratX  Producción: Coptech, Inc., Woburn, Massachusetts    Equipo de Marketing en América:   Paul Ritmo & Jesica Zelek   Equipo de Marketing en EMEAA:    Stéphanie Zanon & Patricia Huber  Equipo de Desarrollo:      Laetitia Benhous, Aurélien Dauvergne & Rémi Triolet  Equipo de soporte:         Annie Houde   Traducción          María Gomez & Jesica Zelek    Copyright © 2003,2010 by Jean‐Claude Larréché, Hubert Gatignon & Rémi Triolet  Software © 2003,2010 by StratX  Markstrat es una marca registrada de StratX  Todos los derechos reservados    No se permite la reproducción de ninguna parte de este libro, ni electrónica ni mecánica, sin el previo  consentimiento del editor.    Los libros usados no se deberían ni comprar ni vender. Cada manual del participante viene con un número  de serie único que debe ser utilizado únicamente por la persona que compró el libro. Si la tarjeta de  registro situada en la parte de atrás de este libro ha sido manipula, devuelva le libro porque usted no va a  poder utilizar el numero de serie.    ISBN# 0‐9743063‐6‐3 ......

Words: 22082 - Pages: 89

Premium Essay

Rosewood Property

...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 tobe weighed and measured. From the research conducted by Rosewood, the most obvious andimmediate pro to a corporate branding strategy is the projected increase in multiproperty stayguests from 5% to 10%. This has the potential to not only increase revenues but also brandawareness, recognition and word of mouth referrals.A full complement of pros and cons to converting to a corporate brand strategy for Rosewood isoutlined in the table below: Pros Cons Increased brandwide usage “Canned and cookie cutter” approach Increased brand recognition No “sense of place” philo sophyConnection amongst properties Loss of uniquenessGood positioning for competition Less differentiationIncreased market/share Potential loss of current brand equityIncreased brand awareness Loss of discretionPromotion of cross-property usage Resistance to change (guests and management)Increased return visits Increased marketing costsBrand loyalty – less property specific Competition tougher among corporate brandedhotelsIncreased revenues Change in the corporate culture is challengingBuilding customer lifetime values Overall customer lifetime value is higher with corporate branding than without, as demonstratedin Exhibit A. Without corporate branding, overall net present value totals......

Words: 488 - Pages: 2

Premium Essay

Rosewood

...Samuel Morisset October 31, 2013 Rosewood The movie “Rosewood” is based on the 1923 massacre in Rosewood, Florida that claimed dozens of African American's lives. At a time when racial tension was incredibly high, the black members of a small segregated community found themselves unprotected from the hatred of the neighboring white men. When a white woman, Ms. Taylor, falsely blames a beating and rape on a black man, it leads to a mob out for blood. Many black people weren't given the due justice of the law and some considered them guilty just for the color of their skin. The chaos shows how racism feeds off the hate and ill-understanding of people. The angry mob knew that the claim was likely untrue, but without too much resistance they were able to act out on their emotions without consequence. Fathers were teaching their boys about race superiority from God, and continuing to spread the idea of a vigilante sort of justice. The danger of this way of thinking became widespread as hate groups such as the KKK roamed the U.S. without much resistance from the government. African American's found themselves unprotected from this uncontrolled hate in a time when social change wasn't welcomed openly. The events of Rosewood shed light on the corruption of the local government in Florida. They recorded the number of deaths in Rosewood to be 8 people dead, two whites, six blacks. This number's in direct conflict with the accounts of the survivor's, who place the number between...

Words: 455 - Pages: 2

Premium Essay

Rosewood

...Rosewood, which was released in 1997 by John Singleton, is a film that is based on an actual incident, an American tragedy that everyone involved tried to forget or deny. In 1923 in the state of Florida a black town, Rosewood, was burnt down to ashes. Rosewood was a place that the blacks owned and paid taxes on; it was a place that they called home. It was burnt down all because of a lie made by a white woman saying she was raped by a black man, or in her words a “nigger”. Although that is the supposed reason that the white men started harassing and killing the blacks, we all can see that it was because of racism. Many forms of racism are shown throughout the movie through words and actions made by the whites and blacks against each other. The blacks were called “niggers” by the whites, and the whites were called “crackers” by the blacks. Rosewood, showed historical accuracy in several parts of the movie. In the movie Singleton painted a picture of white people that is far from simplistic. He shows us the problems of murderous social relations where Fannie Taylor was afraid that her husband would beat her up when he discovered that she had been beaten by her white lover, she relied on the whole system of white supremacy to save her from the abuse of her husband. He shows us the property relations where the white men of the town are primed for a lynch mob mentality when Mann (one of the characters) outbids the white shopkeeper John Wright for a plot of land. Singleton ......

Words: 728 - Pages: 3

Premium Essay

Rosewood Hotels

...1. Summary of the Key Facts of the Case Rosewood Hotels and Resorts is a private luxury hotel management company established in 1979, headquartered in Dallas, Texas. The first hotel managed by the company was The Mansion on Turtle Creek, opened in 1980. As of 2003 the Rosewood had 12 hotels worldwide, with a total capacity of 1,513 rooms, with a nightly rate varying between $120 -$9,000. Rosewood competed with luxury corporate branded hotels such as Ritz-Carlton and Four Seasons but unlike them, Rosewood operated unique properties, each with its own name or brand. Each one of such hotels reflected local character and culture defining Rosewood’s “Sense of Place” philosophy. This meant that each one of the properties captured what was unique about the given location; architectural details, culinary concepts, interiors, etc. The Rosewood branding was soft and meant to be complementary; the Rosewood logo appeared discreetly on low-profile amenities such as clothes hangers and stationary. Hotel greetings did not mention the Rosewood name. 2. Define the branding options and discuss the nonfinancial pros/cons of each. Address the pros and cons and how you will deal with them. Rosewood brand had low recognition and brand-wide usage among guests. While guests were seeking a unique Rosewood property experience and product, they were not making the connection between Rosewood properties and were increasingly identifying with other strong hotel brands. Guest data revealed that......

Words: 846 - Pages: 4

Premium Essay

Rosewood

...Rosewood Hotels: Branding to Increase Customer Profitability and Lifetime Value Rosewood Hotels and Resorts have developed a reputation with a portfolio of luxury hotels. The company’s portfolio of properties adheres to Rosewood’s "Sense of Place" philosophy. This allows each hotel to produce a unique, one-of-a-kind property based on each individual property’s location. Rosewood prides itself on avoiding the corporate brand model or “canned and cookie cutter” approach within all its properties. Growth in the luxury hotel market has been on the decline. Unfortunately because of the individual branding of the different Rosewood Hotels, cross selling rates between Rosewood Hotels was lower in comparison to their corporate brand model competitors. Corporate branded hotels have seen a 10-15% cross property usage rate. Rosewood Hotels only has 5-10% cross property usage rate. In order improve upon the cross-property usage rate, Rosewood Hotels is considering changing their branding strategy to more of a unifying theme to bring more customers back to its hotels. However the Rosewood brand name is relatively unknown. By creating a corporate brand name across all of the properties, Rosewood would run the risk of losing the distinctiveness of each individual hotel. Ultimately, Rosewood Hotels has to make a decision to proceed with corporate branding or to continue emphasis on individual property brands. Recommendations: To offer the best recommendation as to which......

Words: 648 - Pages: 3

Premium Essay

Rosewood Hotels and Resorts Case Study

...Rosewood Hotels and Resorts is a business that has 12 establishments worldwide. Until 2004, the company has run an individual branding strategy; but recent events, such as the adoption of a new President and CEO, have the company considering a corporate branding strategy. Rosewood seems to have hit a roadblock with their current strategy; they are concerned that their guests do not fully understand the Rosewood brand. Rosewood believes if they are able to adopt a corporate brand, that their guests will recognize more of their facilities and become loyal which in turn could increase revenue because their guest’s customer lifetime value will have risen. Rosewood also believes that by implementing a corporate brand, they will have an advantage over their competitors. The main issue with their current branding is that their customers are unknowledgeable about their brand. If they instill a corporate brand, more guests will choose their Hotels over competitors. Rosewood believes that by becoming a company who runs a corporate brand strategy, they will be able to increase their cross-selling rate. According to analysis of guest data, corporate-branding properties had higher cross-selling rates among their properties than those that utilized individual branding. Research shows that having a corporate-branding strategy resulted in a 10% to 15% cross-selling rate; this is because up to 40% of their guests returned for another stay. We compare these numbers to those of the......

Words: 859 - Pages: 4

Premium Essay

Rosewood Movie

...The film Rosewood is a dramatization of the true story of the Rosewood Massacre that occurred in 1923, resulting in the deaths of two whites and six blacks because of the lie that one white woman, Fannie, who claimed to have been beaten by a made up black man in order to cover her affair with a white man. From there, rumors began to spread and her “beating” soon became a rape allegation and the white townspeople turned a violent hand on the black community. From there, events began to roll into a snowball effect created as a result of the racial supremacy and tension that came as a result of accusations and lack of investigation. Through the film, a better understanding of the themes of unequal enforcement and protection, the use of lynching, and the failure of the 14th amendment to provide blacks with their basic rights provided by the constitution can be developed by the viewer, whether they are aware of it or not. Unequal enforcement and unequal protection played major themes throughout the film. Blacks were subject to enforcement and protection notably lesser than that of white counterparts. This was evident several times throughout the film, especially in scenes where the angry mob of whites went throughout the town wreaking havoc with little to no remonstration from law enforcement. The sheriff in the movie was very passive and basically allowed the whites to do what they wanted to in order to appease them. This showed how blacks were prone to getting treated any kind...

Words: 806 - Pages: 4

Premium Essay

Rosewood Hotels

...Overview At the completion of this assignment you will achieve the following module objectives: 1. Measure the profit impact of marketing strategies. 2. Determine the impact of customer retention rates through the Customer Life Time Value. Instructions Read your team member’s case situation analysis and compare the spreadsheets posted in the corresponding group discussion forum. Engage in discussions with your team members to answer the new case questions and finalize the financial spreadsheet. You should submit the answers to the following questions and the spreadsheet in the corresponding group link included in the assignment drop box. The group submission will be graded according to the group case rubric. Rosewood Hotels & Resorts 1. What would you recommend to Rosewood Hotels & Resorts? In your answer include the following: • Provide 3 arguments that would support your decision. • Describe how you would implement your recommendation. Our recommendation to Rosewood would be to implement the Corporate Branding Strategy for its portfolio. • The Corporate Branding Strategy increases the number of stays per guest, which in turn, increases the top line revenues generated with the number of nights per stay remaining constant under both scenarios. With a gross profit margin of 32%; this translates to over 400k in Gross profit (before marketing costs). • Their retention rate would also increase 5 percentage points by providing...

Words: 895 - Pages: 4

Premium Essay

Rosewood - Case

...2087 JUNE 15, 2007 CHEKITAN S. DEV LAURE MOUGEOT STROOCK Rosewood Hotels & Resorts: Branding to Increase Customer Profitability and Lifetime Value Introduction For nearly 25 years, Rosewood Hotels & Resorts (Rosewood), a private hotel management company, sought to build a global reputation with iconic luxury hotels such as The Mansion on Turtle Creek in Dallas and The Carlyle in New York—trophy properties so distinctive, each could thrive on its own name, without any “corporate” identification (see Exhibit 1 for brand history). The Rosewood brand was muted, unmentioned in advertising, and known mainly to hotel professionals. However, in early 2004, to boost the company’s growth, John Scott, Rosewood’s new president and CEO, and Robert Boulogne, vice president of sales and marketing, were considering a new brand strategy. As Boulogne recalled: We thought the time was right to establish Rosewood as a true brand incorporated into the name of each hotel and prominently displayed in all communications for and at our properties. This would help provide us with a platform for encouraging guests who stay at one of our properties to stay at some of the others. But, they wondered how far they could push this branding strategy without undercutting the distinctiveness of each individually branded hotel. Company Profile and Background Headquartered in Dallas, Texas, Rosewood Hotels & Resorts, L.L.C, was a privately held company, established in 1979 by the......

Words: 5840 - Pages: 24

Premium Essay

Rosewood

...Memorandum To: From: Cory Castle Date: September 27, 2015 Re: Rosewood Hotels and Resorts CEO John Scott’s recommendation to Rosewood Hotels & Resorts (Rosewood) board of directors is to adopt the corporate branding strategy to boost company growth through increased cross-selling rates across its line of luxury hotels around the world. The Customer Lifetime Value (CLTV) for the next 6 years as referenced in the “Rosewood Hotels & Resorts: Customer Lifetime Value (CLTV) Analysis”, Rosewood is projected to see an increase in revenue of approximately $29.6 Million with a corporate brand strategy. The result was derived from $82.60 per customer CLTV in increased marketing costs, times the number of projected repeat customers (115,000), which was $9,498,542 in increased profit. This profit divided by 32% gross margin which resulted in $29,682,943 of increased revenue over a 6 year time period. This projected increase in revenue substantiates Scott’s initiatives. Currently, Rosewood is operating under an individual hotel branding concept, building on its one-of-a-kind, luxury hotel concept of “A Sense of Place”. Rosewood has become known for its ability to foster an environment detailed to the individual consumer. The change to the Rosewood corporate brand is projected to help customers associate the suite of luxury hotels under the Rosewood name and encourage them to stay at other hotels worldwide within the conglomerate. Of the 40% of customers who......

Words: 898 - Pages: 4

Premium Essay

Rosewood Case

...Rosewood Hotels & Resorts Case Study Background The Rosewood Hotels & Resorts has been in business for close to 25 years. It operates in the luxury hotel segment, with a focus on one-of-a-kind hotels. Each hotel reflects the local culture and character of its location. Up to this point it has allowed properties to thrive on their own with very little corporate identity. However, management feels there is an opportunity for growth in the market and is considering a new brand strategy; one that would establish the Rosewood brand and incorporate it into the name of each property as well as introduce more Rosewood branded items in the hotels. It needs to present its strategy to the Board of Directors and is questioning how far it can push the branding without hurting the individual identities of the properties. Industry There are two distinct groups in the luxury hotel industry, the “Collections” of individual properties such as Auberge, RockResorts, and Orient-Express, and the Corporate Branded hotels such as the Ritz-Carlton and Four Seasons. Rosewood operates in the “Collections” group. It built its concept around “A Sense of Place®”, which is meant to reflect how each property captures what is unique about its location. This is fairly typical of the “Collections” brand model, where companies focus branding and marketing on individual properties, with the overall corporate brand relatively muted in the background. The Corporate Branded hotels focus......

Words: 3959 - Pages: 16

Free Essay

Rosewood, the Study, the Case, the Story

...Rosewood, The Story, The Study, The Case Jane Central State University ATH-111 This case study focuses on Rosewood, Florida; a once flourishing African American colony annihilated in the course of a weeklong occurrences of violence in early January of 1923. This study will show the effects of segregation in the United States, which continued after laws were passed, but unfortunately ignored by people who wanted to continue to have power, social control, and inequality over an indigenous group of human being living within their community. Rosewood is a true, however historically-stifled chain of events that took place in small blooming town in Rosewood, Florida. Rosewood industry was cedar wood and mills, and a railroad station that transported products, communal relations between the towns of Rosewood and Sumner were one of tolerance. The African American community were aware of the inequality that was afforded to them, but also made every effort to build a culture of stability, and building a new cultural identity of freedom within an almost self-sufficient predominately African American community in spite of the power structure of its white neighbors and systematic racism (Dye, 1997). With the accusation of violence against a white women the mob viewed this act a direct threat to their social structure and the legacy. Social hierarchy played a major role in the mobs attitude, the violence was almost immediate, and within six days the accusation caused......

Words: 1827 - Pages: 8

Premium Essay

Rosewood Hotels and Resorts Case Study

...Rosewood Hotels and Resorts is a business that has 12 establishments worldwide. Until 2004, the company has run an individual branding strategy; but recent events, such as the adoption of a new President and CEO, have the company considering a corporate branding strategy. Rosewood seems to have hit a roadblock with their current strategy; they are concerned that their guests do not fully understand the Rosewood brand. Rosewood believes if they are able to adopt a corporate brand, that their guests will recognize more of their facilities and become loyal which in turn could increase revenue because their guest’s customer lifetime value will have risen. Rosewood also believes that by implementing a corporate brand, they will have an advantage over their competitors. The main issue with their current branding is that their customers are unknowledgeable about their brand. If they instill a corporate brand, more guests will choose their Hotels over competitors. Rosewood believes that by becoming a company who runs a corporate brand strategy, they will be able to increase their cross-selling rate. According to analysis of guest data, corporate-branding properties had higher cross-selling rates among their properties than those that utilized individual branding. Research shows that having a corporate-branding strategy resulted in a 10% to 15% cross-selling rate; this is because up to 40% of their guests returned for another stay. We compare these numbers to those of the......

Words: 319 - Pages: 2

Premium Essay

Rosewood Case Analysis

...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%. Overall customer lifetime value is higher with corporate branding than without, as demonstrated in Exhibit A (Customer lifetime value calculation spreadsheet). Without corporate branding, overall net present value totals $378.49 per guest while with branding that number jumps to $434.78. 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. Rather than renaming The Carlyle to The Rosewood Carlyle, I would recommend the name become “The Carlyle, a Rosewood Property” .This will associate the properties with the Rosewood name without......

Words: 355 - Pages: 2