# ROSEWOOD HOTELS & RESORTS: CUSTOMER LIFETIME VALUE (CLTV) ANALYSIS

Inputs

Total Number of Unique Guests
Average Daily Spend
Number of Days Average Guest Stays per Stay
Average Gross Margin per Room
Average Number of Visits per Year per Guest
Average Marketing Expense per Guest (system-wide)
Average New Guest Acquisition Expense (system-wide)
Total Number of Repeat Guests
of which: Total Number of Multi-property Stay Guests
Discount Rate
Average Guest Retention Rate

CLTV Calculation With No Changes to Brand Strategy
Year
Number of Nights per Stay
Number of Stays per guest (assuming they are retained)
Revenue Per Night
Revenue per Customer
Gross Profit per Customer
Less Cost to Acquire Customer
Less Annual Marketing Cost per Customer
Cash Flow from Customer if Retained
Probability of Being Retained
Expected Cash Flow from Customer
Discount Factor
NPV of Expected Cash Flow from Customer
Total NPV of CLTV
CLTV Calculation With New Brand Strategy
Year
Number of Nights per Stay
Number of Stays per guest (assuming they are retained)
Revenue Per Night
Revenue per Customer
Gross Profit per Customer
Less Cost to Acquire Customer
Less Annual Marketing Cost per Customer
Less Additional Marketing Cost per Customerb
Cash Flow from Customer if Retained
Probability of Being Retained
Expected Cash Flow from Customer

Discount Factor NPV of Expected Cash Flow from Customer Total NPV of CLTV Increase in CLTV per customer of new Marketing Plan Multiplied by # of Customers to obtain increase in profit of Rosewood from new brand strategy Divided by 32% gross margin to obtain increase in Revenue of Rosewood from new brand strategy b \$1 million growing at 3% per year allocated to 115.000 guests .

90 0.70 \$2.00 \$150.92 \$509.66 0.00 (\$150.3 \$138.56 \$0.96 \$518.58 \$9.58 0.22 \$120.Without Rosewood Branding (2003) 115.000 \$750.44 2005 2.2 \$842.00) 1.00) \$378.3 \$842.00 \$610.750 With Rosewood Corporate Branding 115.000 \$750.23 \$553.00 \$661.00 .2 \$795.19 \$0.857 \$441.00 \$476.3 \$795.00 \$1.00 1.926 0.00 24.022.90 \$137.90 \$476.00) 1.00 19.00 \$137.908.0 1.191.48 \$647.67% 8% 21.04 \$150.000 (\$150.92 (\$150.98 1.67% 2003 growing at growing at (\$150.0 32% 1.0 1.13 \$133.35 \$72.70 \$2.919 11500 8% 16.02 \$701.17 \$84.00 \$518.28 \$150.49 2003 2005 2.0 1.0 32% 1.0 1.00) 2004 2.00 (\$150.067.00 2.00 2.70 \$150.00) \$8.78 2004 2.00 \$2.00 \$133.66 1.169 5.2 \$130.

857 \$480.60 \$9.1.926 0.000 (\$150.00) \$461.943 0.17 \$102.498.09 \$82.682.542 \$29.92 .

43 0.3 \$893.0 1.49 0.71 \$620.12 0.87 2008 2.00 \$2.681 0.54 \$835.2 \$946.063.71 \$155.23 \$661.0 1.003.32 \$150.735 0.00 \$155.09 0.38 \$719.553.79 2008 2.00 \$1.0 1.2 \$1.0 1.03 \$15.00 \$146.67 \$2.19 \$0.0 1.07 \$0.83 \$686.26 \$2.01 \$6.11 \$885.2 \$893.84 0.55 0.86 \$2.05 \$27.00 \$142.16 \$142.05 \$146.00 \$1.27 \$10.34 .97 2007 2.68 \$10.69 0.408.08 \$674.33 \$0.81 \$770.3 \$1.48 0.26 \$2.Growth Rate 6% 3% 2006 2.0 1.64 \$9.89 \$2.05 2006 2.0 1.98 \$0.00 \$150.83 \$787.3 \$1.05 2009 2.89 \$2.461.794 0.67 \$2.0 1.33 \$817.003.05 \$543.00 \$0.00 \$0.23 \$9.609.46 \$727.630 \$12.143.272.78 0.50 \$591.19 2007 2.322.03 \$0.79 \$631.86 \$2.11 2009 2.766.32 \$580.82 \$0.063.2 \$1.00 \$0.3 \$946.48 \$743.

01 \$0.794 0.735 0.630 \$22.05 \$4.72 \$1.681 0.22 .0.