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Rosewood Hotels and Resorts Case Solution & Answer

Rosewood Hotels and Resorts Case Solution

Alternative: 1

The company should inaugurate afrequent visit program which will offer discounts or reward points every time a person stays in the hotel.

Pros

  • It is proven to be a successful technique that attracts maximum customers for arepeat
  • It will encourage frequent visits to the same hotel, due to discounts and other services.
  • It will help the company build a strong recognition in the mind of the customers by offering an exquisite set of services.

Cons

  • The technique works more efficiently with large chains of hotels.
  • The strategy will not create a strong brand awareness message in the mind of the consumer.
  • It will not create brand loyalty and will keep encouraging the standalone brand portfolio strategy.

Alternative: 2

The company should develop its corporate brand in which it strongly endorses and associates all its properties with the prominent name of Rosewoods.

Pros

  • It will create a strong brand awareness in the market about the corporate image of the company.
  • It will help the company pursue consistent and uniform set of offerings and services that customers like, in all its properties to maximize the satisfaction level of the customer.
  • It will allow the customers to visit various hotels that rosewood covers,for building brand image in the market strongly.
  • It will signal a strong brand recognition and will allow the customers to associate themselves,not with the culture but with the value rosewood offers.
  • It will enable the company to build a corporate brand which will increase its profits, shares and the repeat visits.
  • It will create high customer loyalty towards rosewoods.

Cons

  • The business strategy will create an internal resistance from the managers of different properties to maintain their separate brand, especially when the brand itself has strong equity.
  • It will drive away those customers who value strong cultural heritance of the separate properties of Rosewood.
  • It will reduce the motivation level of the employees, thus will affect the performance and productivity.

Decision Matrix

Factors Alternative:1 Alternative:2
Brand Recognition 1 2
Brand Awareness 1 2
Strong corporate Brand 1 2
Repeat Visit 2 1.5
Total 5 7.5

Customer Life Time Value Analysis

To assess the customers’ value over the business considerations, it is identified that the company proposed two ways of analysis to determine the expected outcome from the related guests and the stay level. The first study consists of the use of individual branding criteria that would involve various tools and techniques to identify the average customers’ stay and the gross revenues and profits associated with them regarding present value of CLTV per customer. From the following results, it indicates that total expected net present value of CLTV would be $182.63 and is projected for the next six years.

However, such value represents the increasing level of night stay as well as revenues per customer. Moreover, it also shows gross profit margins of each customer and the total per year. The average retention rate is somehow less than the industry norms. So, it illustrates that the total value is subjected to generate a moderate level that would not allow Rosewood to process the same strategy further shortly. On the other side, the second CLTV analysis consists of the new branding strategy (Corporate Branding) that would allow increasing the level of retention rate as well as the number of repeated guests.

So, the results from the new scenario show that new branding would generate the net present value more than four times of individual branding. The same process in this situation would be incurred, but alsoto marketing cost per customer, that increased the overall cost of the budget. However, the results are favorable for the hotel to implement for its future success. Therefore, the additional gross margin for the corporate branding measure would be $2,361,which indicates the future success and increase in the market value of the hotel.

Recommendation

  • The company should adopt the corporate branding strategy alternative in order topursue the business in the modern time. In doing so, it should not immediately discard the culture and heritance of separate properties which will create a negative impact on consumer perception, but slowly, subtly include the strongly endorsed name of Rosewood with it.This will help the company maintain the cultural structure of each property while associating the name ‘rosewood’ with it.(Dannis, 2015)
  • The company, before implementing the corporate strategy, should take the managers of the properties into confidence.In doing so, the management should show the big picture and encourage their involvement in the decision-making process. Thetactic will allow the company to make the managers own the change and hence eliminating resistance.
  • Including the managers in designing the corporate strategy, will also enable and encourage ownership and thus enable the company to pursue and implement its corporate strategy smoothly throughout the portfolio.
  • The company should initiate alliances with the travel agencies and associate itself in the hotel booking through travel agencies. To encourage travel agencies to recommend Rosewood, offer exclusive commission and quota to the agents. The approach will create strong brand recognition and thus will propagate Awareness of the hotels.
  • The company should design a TVcommercial in which the main focusremain concentrated on the name of Rosewood. While it strongly endorses its name with different properties. E.g.:Rosewoods Turtle Creek.(Keller, 2014)………………………..

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