ROSEWOOD HOTELS

& RESORTS ANALYSIS

Name: Lilian (Ying) Wang

Student number: 1001277520

Course: RSM251
 TABLE OF CONTENTS
 Issue statement……………………………………………….1

 Situation analysis…………………………………………….1

o SWOT analysis

o Conclusion

 Analysis of alternatives………………………………………3

 Recommendation……………………………………………..6

 Action and Implementation plan……………………………..6

o Short-term

o Long-term
Issue statement

The major problem was that Rosewood Hotels & Resorts had low brand awareness and

recognition among its customers resulted a low multi-property cross-selling rates compare to its

competitors. Should it adopt new management program and change its marketing strategy? How should

the Rosewood Hotel & Resorts manage the new branding strategy without undercutting the

distinctiveness of each individually branded hotel?

Situation analysis

 SWOT

o Strength

Rosewood Hotels & Resorts has a global reputation with iconic luxury hotels that had 12

hotels worldwide. Rosewood differentiates itself from its competitors from its one-of-kind

properties. Unlike other chain-like luxury hotels, Rosewood hotels have the flexibility to capture

different local culture, which makes each of its hotel unique. Rosewood hotel has adopted the

central reservation system (CRS), which allows Rosewood hotel to better track its customers’

preference. With the knowledge of customer preference ahead, Rosewood hotel can better prepare

for customers’ arrival and provide a more personalized service.

The majority of the brands under the Rosewood have a RevPAR index greater than 1,

which means Rosewood hotel generate more profit than its competitors in general. For example,

Las Ventanas Al Paraiso, one of the hotels located in Mexico, even has a RevPAR index of 3.62.
o Weakness

Most of Rosewood customers had low awareness of the Rosewood brand due to two

reasons. The first one was that the Rosewood rand was muted and unmentioned in advertising.

Secondly, Rosewood was emphasis on its individual brand strategy that customer cannot found

the connection among Rosewood properties. When guests were seeking a Rosewood property

experience and product, more and more guests were identifying other strong hotel brands, which

usually were the competitors of the Rosewood hotel. This fact directly resulted the lost of

customers that Rosewood had a lower multi-property cross-property usage rate compare to it’s

competitors; only 5% of the guests had stayed in more than one of Rosewood’s properties.

o Opportunity

Rosewood had a great potential to increase its cross-property usage due to the fact that its

gusts were usually satisfied had with high quality service and great experience Rosewood hotels

had provided.

Adopting the frequent-stay program could be an opportunity for Rosewood to increase

the repeat business. If a visit in one of the Rosewood hotels could redeem for a discount or other

services in another Rosewood hotel, customers would love it and tend to choose Rosewood hotels

over other brands.

Corporate branding approach would be another method to let customers know the

connection among each individual hotel of Rosewood. Once the Rosewood brand had created

value in people’s mind, the Rosewood name would encourage them to try different properties.
 o Threat

There were many international, famous hotel brands in the luxury hotel industry, which

makes the market highly competitive. There is also a risk associated with implementing the new

branding strategy. The new branding strategy would work against Rosewood’s original individual

branding strategy; brand standards could eliminate the uniqueness of each individual hotel. On

the other hand, some of the managers and guests are resistance to Rosewood branding because

they are more related to individual brand rather than Rosewood. As a result, the failure of the new

branding strategy would be really costly.

 Conclusion

From the SWOT analysis, Rosewood was depending on the collection strategy and it resulted

of losing repeat gusts. However, the “collection” of unique properties distinguish Rosewood from its

competitors. Therefore, the Rosewood Hotels & Resorts is seeking for a strategy to expose its

corporate brand, to prevent losing potential profit and increase its cross-selling rate without

undercutting too much the unique characters of each individual branded hotel.

Analysis of alternative

Branding Strategy (Qualitative Analysis)

 Alternative 1: Individual brand strategy

o Pro’s

If the Rosewood hotel continue with the individual brand strategy, there would be no increase in

marketing expenses, which meant less risky. Rosewood hotel could also maintain its “Sense of

Place” philosophy and provide gusts various experience in different properties. Rosewood hotels
 would retain its original loyal customers with its unique characteristics and good service. If one

of the properties accidently had a bad reputation, it would not impact other properties.

o Con’s

Since there was no investment in marketing the corporate brand, Rosewood would not gain a

higher level of brand awareness. In this case, people still had no idea of the connection among the

individual brand, so that they would not think about another Rosewood and there would be no

increase in cross-property usage.

 Alternative 2: Corporate brand strategy

o Pro’s:

With the corporate brand strategy, Rosewood hotels would have a stronger connection

among each individual hotel and have a broader brand recognition. A closer relationship among

each hotel could help each property to provide a consistent, personalized service based on the

global data warehouse for each individual customer. An excellent reputation among gusts

associated with a higher level of brand recognition would lead to a positive brand awareness,

more consumers would value Rosewood as a luxury brand that provides high quality service. This

would encourage guests to select Rosewood hotel over other brand when planning a trip. If the

guests were satisfied and happy with the experience, they would tend to use another Rosewood

property for their next trip. Additionally, if a gust had a good experience with the Rosewood hotel

and was surrounded with positive image of the brand, it would be easier to have a customer

loyalty.

o Con’s

First on the contrary side, corporate branding approach requires a high expense in

marketing and advertising. Secondly, there are some of the managers and guests resisted the
 corporate brand strategy. Managers worried about losing their autonomy to manage the

properties and some of the guests were more emotional bond with Rosewood’s individual brand

than with Rosewood itself. The launch of the new strategy could make guests feel alienate. If the

new strategy fail, Rosewood would lose a lot of money and portion of their original customer.

Quantitative Analysis

Without Rosewood With Rosewood

Column1 Branding (2003) Corporate Branding

Total number of unique guests 115,000 115,000
Average daily spend $750 $750
Number of days average guest stays 2 2
Average gross margin per room 32% 32%
Average number of visits per year per guest 1.2 1.3
Average marketing expense per guest(system

wide) $130 $138.70

Average new guest acquisition expense(system

wide) $150 $150

Total number of repeat guests 19,169 24,919
Of which: Total number of multi-property stay

guests 5,750 11,500

Average Guest Retention Rate 16.67% 21.67%
Average Gross Profit per Gest $576 $624

Recommendation

Rosewood Hotels & Resorts should set up the frequent-stay program, adopt the corporate brand

strategy and remain each hotel’s unique characteristics. From the previous analysis, it showed that the

corporate branding strategy would capture a higher revenue when the total number of unique guests

remained unchanged.
 As previously mentioned, there was concerns about that Rosewood could lost its original loyal

guests. However, in order to keep, Rosewood should definitely maintain its high quality service and

reward them by set up the frequent-stay program. In addition, Rosewood was confident about their

resident experience and service provided. Therefore, there should not be too much worries about losing

customers.

Action and Implementation plan

 Short-term

Within a short term, Rosewood Hotels & Resorts should set the company goals, such as

double the multi-property cross-selling rate, and put Rosewood logo more visible in each individual

hotel, such as prefix Rosewood on each individual brand name and bedroom set with Rosewood logo.

Then, in order to minimize the managers’ worries, inform employees that the company had adopt new

strategy, but would still keep the distinctiveness of each hotel.

Next, Rosewood should introduce the frequent-stay program into the management system and

start share information through the central reservation system (CRS) program to provide more

personalized service for each return visit customer.

 Long-term

With in a longer time period, Rosewood Hotels & Resorts should invest heavily on

advertising corporate brand through various methods. The advertising should emphasis that

Rosewood is the connection among each individual hotel and mention the frequent-stay program.

Also, Rosewood hotel should increase the usage of central reservation system (CRS) to have more
detailed customer data base. Rosewood could build a trustable relationship with its customers by

know each customer’s preference.