Hbs - Rosewood Case

1322 WordsApr 5, 20116 Pages
Rosewood Hotels and Resorts is considering a new brand strategy in an attempt to increase their multi property guest stays, revenues and cross selling rates. However, the company needs to do so without the expense of possibly diminishing the powerful brand image and strategy of their existing properties. Rosewood has built a customer value proposition on a core set of philosophies, as well as, strategic and marketing plans designed to create their unique competitive advantage through differentiation. Adding a corporate branding strategy would diminish previous efforts and be detrimental to Rosewoods’ intended objectives and goals of increasing profitability and customer lifetime value. Introducing a corporate branding strategy would…show more content…
However, to make a decision that would signify a long-term, strategic change of direction simply based on those numbers alone would be a prudent business decision for Rosewood executives. To find their answer to increasing customer lifetime value, the statistics in exhibit 5 of the article provide a few clues. To compare Rosewood to corporate branded luxury hotels Four Seasons and Ritz-Carlton takes Rosewood out of its comfort zone and niche market where the company has experienced and achieved success. Rosewood’s 12 properties are nowhere near the 58 properties Four Seasons owns, nor the 52 the Ritz-Carlton owns. Rosewood is not necessarily even in the same ballpark compared with the two luxury hotel, corporate giants. The operating statistics however, paint an entirely different financial outlook of the three competitors. Over the three year period spanning from 2001 to 2003, Rosewood has a mean daily room rate that averages $52 and $105 more than Four Seasons and Ritz-Carlton respectively. Occupancy rates of Rosewood average 60%, which similarly compares to Four Seasons 64% and Ritz-Carlton’s 66%, however Rosewood averaged significantly higher RevPAR than both the other two corporate luxury hotels. Rosewood is charging significantly higher rates while selling similar occupancy and therefore experiencing higher revenue rates per guest. The most telling statistic over the three year period is that Rosewood increased their occupancy rate while downsizing the

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