Rosewood Hotels and Resorts Harvard Case Solution & Analysis

Analysis............

Analysis of corporate branding is based on three points, which include the need of corporate branding for Rosewood, advantages and disadvantages of moving from individual branding to corporate branding and an assessment of corporate branding based on customer lifetime valuation (CLTV) model.

  1. 1.      Need of corporate brand strategy for Rosewood

Rosewood has identified that opting into corporate branding would help in achieving higher profits and increasing the corporate brand awareness amongst customer would help Rosewood; in this way a guest who has experienced the quality of any of their hotel would not be reluctant to use their hotels else were. In addition, it has been noticed that the guests who visit individual Rosewood brand consists of very few who visit the Rosewood hotels running under other brands.

As per the results of data gathered through central reservation system (CRS); it has been noticed that only 5% of Rosewood guests have stayed in more than one of Rosewood’s properties while the corporate branded hotels are enjoying 10% to 15% cross-property usage rate and this encourages the Rosewood management to consider corporate brand strategy.

  1. 2.      The pros and cons of moving from individual brands to a corporate brand?

While corporate branding increases the cross-sales; it also brings some disadvantages to Rosewood.

A comparison of advantages and disadvantages arising from corporate branding are numerous. Its first advantage is that, moving from individual brands to corporate brand will increase the number of multi-property guest stay from 5% to 10% and this rise in multi-property stay will increase the average number of visits per year per guest from 1.2 to 1.3.

Secondly, John Scott, who is the director of acquisitions and asset management at a private real estate investment group and a Rosewood board member, recognizes that Rosewood brand has low recognition because individual brands do not display the Rosewood brand prominently; hence the corporate branding is an un-used asset that can be utilized to increase revenues.

Moreover, as per statements of Scott and Boulogne, it has been noticed that individual brand strategy is not working effectively because guests want a unique property experience and product, but they are not able to identify the properties connected with Rosewood, instead they are identifying the other strong hotel brands as Rosewood property hence; opting into corporate brand will create the awareness amongst guests in order to increase the cross-property visits.

Further, chairman of the board, Mr. Philip Maritz, is also convinced that individuals, who prefer the fashion and culture, will be interested in distinctive and exclusive collection of hotels, but vast majority of market seems to value the corporate branding luxury hotels. This statement suggests that individual branding will be like limiting the market for Rosewood only to a limited number of sophisticated individuals.

Moreover, once corporate brand strategy is implemented it would bring the advantage of economies of scale benefit to Rosewood; mean while brand management cost would be low for managing its portfolio of individual hotels and universal management strategy would be used to manage the portfolio.

Whereas in case of individual brands, if any of the individual hotels lose its brand value due to the happening of a mishap, it would not impact the other hotel brands but in case of corporate branding if a mishap takes place at any of the hotel it would damage the corporate brand, and can potentially damage the image of other Rosewood hotels.Rosewood Hotels & Resorts Case Solution

Rosewood corporate branding strategy would help in retaining the loyal customers who would prefer to visit Rosewood hotels after they were aware of the Rosewood corporate brand; hence in this way better brand awareness would be achieved.

It should be noted that, in case proposed corporate branding strategy failed to succeed then it would be a disaster for the Rosewood, resulting in alienation of some customers. Since the loyalty of customers was specific to individual brand; hence it might not work in case of corporate branding.

Rosewood’s each individual hotel brand was built according to the local culture, architecture history, interior as per the Rosewood’s “Sense of Place” philosophy, giving Rosewood a differentiating point in the hotel industry and if Rosewood decided to change its strategy........................

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