Inputs

Additional
Costs
Required
perChanges
annum to Brand Strategy
CLTV
Calculation
With
No
Total
Number
of
Unique
Guests
Year
Daily
Spend
Nights
per
Stay
Days
Average
Guest
Stays
per
Stay
Number
of
per
guest
(assuming
they
are
Average
Gross
Margin
per
Room
Per
Night
Number
of
Visits
per
Year
per
Guest
Revenue
per
Customer
Marketing
Expense
per
Guest
(system-wide)
Gross
Profit
per
Customer
Average
New
Guest
Acquisition
Expense
(system-wide)
Cost
toStays
Acquire
Customer
Total
Number
of
Repeat
Guests
Less
Annual
Marketing
Cost
per
Customer
of
which:
Total
Number
of
Multi-property
Stayretained)
Guests
Cash
Flow
from
Customer
if
Retained
Discount
Rate
Probability
of
Being
Retained
Average
Guest
Retention
Rate
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/stay
Number of stays/guest (assuming retention)
Revenue/night
Revenue/customer
Gross Profit per Customer
Customer acquisition cost
Annual marketing cost/customer
Incremental marketing cost/Customerb
Cash Flow from Customer if Retained
Probability of retention
Expected customer cash flow
Discount factor
NPV of Expected Cash Flow from Customer

Total NPV of CLTV

Increase in CLTV per customer of new Market

Multiplied by # of Customers to obtain increas
Divided by 32% gross margin to obtain increas
b
$1 million growing at 3% per year allocated to 1

115,000
$750.00
growing
2.0
32%
1.3
$138.70
growing at
at
$150.00
24,919
11500
8%
8% $1,000,000
21.67%
Without Rosewood
Branding
With
Rosewood
Corporate
115,000
2003
2004
$750.00
2.0
2.0
1.2
32%
$795.00
1.2
$1,908.00
$130.00
$610.56
$150.00
($150.00)
19,169
($133.90)
5,750
$476.66
1.00
1.00
16.67% ($150.00)
$476.66
1.000
1.080
($150.00)
$441.35
$378.49

2005
2.0
1.2
$842.70
$2,022.48
$647.19
($137.92)
$509.28
0.17
$84.90
1.166
$72.78

6%
3%
2006
2.0
1.2
$893.26
$2,143.83
$686.03
($142.05)
$543.97
0.03
$15.12
1.260
$12.00

Strategy
2003

2004
2.0
1.3
$795
$2,067
$661.44

2005
2006
2.0
2.0
1.3
1.3
$843
$893
$2,191
$2,322
$701.13 $743.19

-$150.00
-$133.90 -$137.92 -$142.05
-$8.96
-$9.23
-$9.50
-$150.00 $518.58 $553.98 $591.64
1.00
-$150.00
1.00

1.00
$518.58

0.22
$120.04

0.05
$27.78

1.08

1.17

1.26

($150.00) $480.17

$102.92

$22.05

$461.09

w Marketing Plan
in increase in profit of Rosewood from new brand st
ain increase in Revenue of Rosewood from new bran
ocated to 115,000 guests

Exhibit 8
8
Exhibit
Exhibit
Page
5 8
Exhibit
8
Sourcce

2007
2.0
1.2
$946.86
$2,272.46
$727.19
($146.32)
$580.87
0.00
$2.69
1.360
$1.98

2008
2.0
1.2
$1,003.67
$2,408.81
$770.82
($150.71)
$620.11
0.00
$0.48
1.469
$0.33

2009
2.0
1.2
$1,063.89
$2,553.33
$817.07
($155.23)
$661.84
0.00
$0.09
1.587
$0.05

2007
2008
2.0
2.0
1.3
1.3
$947
$1,004
$2,462
$2,610
$787.79 $835.05

2009
2.0
1.3
$1,064
$2,766
$885.16

-$146.32 -$150.71
-$9.79 -$10.08
$631.68 $674.27

-$155.23
-$10.38
$719.55

0.01
$6.43

0.00
$1.49

0.00
$0.34

1.36

1.47

1.59

$4.72

$1.01

$0.22

w brand strategy
m new brand strategy

$82.60
$9,498,542
$29,682,943