Rosewood Case Analysis

Introduction to Rosewood:
In the luxury hotel business

o Chain of restuarants
o Unique locations
o Customized service and value position
Target segments- Wealthy tourists and corporates
Has established its name to enhance a propertys value by creating unique, one-of-a-kind
properties with a small ultra-luxury residential style that differentiated itself from other chain
like luxury competitors

One of medium sized luxury hotel companies that work with individual brand concept, but
growing at ~90% and still small

It is the second largest player after Orient Resorts with this business model, but significantly
lower than the most established brands such as Hilton, Ritz and Hyatt
Competes with the likes of corporate branded Ritz-Carlton, Four seasons, St. Regis, One &
Only and Mandarin Oriental Hotels
What is the value proposition of Rosewood?
Customer
o Each property featured architectural details, interiors, and culinary concepts that
reflected local character and culture and defined companys sense of place
philosophy
o Customized service vs. standardized service from corporate branded competitors such
as Hilton and Ritz

o Exclusive high-end service quality- Very personalized service
Property owners
o Boost their business and enhance the value of the property
o Their individual branding is intact
o Saving on training cost
o Rosewood design and service standards have flexibility and creativity. Managers
wont feel happy
o Helps in creating the brand equity of the hotel property
o Access to Common Reservation system- Preferences are saved and can be leveraged
to provide customized service.
o Knowledge of spending pattern of the customer
Then how exactly it differentiates itself from the rest and what is the companys secret?
Captures what is unique about the place (Commitment to unique, one-of-a kind, luxury
properties) - Different from same type of luxury corporate hotel rooms and experience that its
competitors such as Hilton and Ritz provide. Rosewood design and service standards have
flexibility and creativity
What is Rosewood doing?
Enhancing the brand of the individual properties, but rosewoods brand remains secondary
and not well recognized.

Rosewood hotels do their individual marketing
What is the problem and why are we discussing?
Rosewood branding has low recognition- In fact, no body recognizes the brand
o Customers do not recognize the Rosewood brand. They dont know what Rosewood
do
o Few agents know but they dont care about the Rosewood brand. They think that it
does not stand in front of the likes of Hilton or Ritz

Extremely low cross-property usage- Because the customers are not making connections
between Rosewoods collections of properties. They are going to other brands hotels. This is
resulting in loss of business.
o Although some properties enjoyed return visits of up to 40% of guests, only 5% of
Rosewood guests had stayed in more than one of Rosewoods properties. This is
typical rate for individual branded hotels. In contrast, the corporate-branded hotels
enjoyed 10-15% cross-property rates.

Difficult to establish High Brand Recall in a highly competitive market
Smaller size of the
Other disadvantages associated with individual branding
Failure to take advantage of the scale- cost synergies

Negligible cross selling opportunity
Decreasing bargaining power of Rosewood vs. property owners- Standardisation vs. unique
Limitation on growth- Lack of differentiation in a highly competitive/ noisy market would
eventually lead the property owners to associate themselves more with established brands
such as Hilton and Hyatt

With increasing scale, means lower control that could hurt service quality
Hence, definitely from a strategic point of view the company should resort to enhancing its
corporate branding
What are the disadvantages of Rosewood deciding to go for corporate branding?
o
Pros
Increased brandwide usage
Increased brand recognition
Connection amongst properties
Good positioning for competition
Increased market/share
Increased brand awareness
Promotion of cross-property usage
Increased return visits
Brand loyalty less property specific
Increased revenues
Building customer lifetime values
Cons
Canned and cookie cutter approach
No sense of place philosophy
Loss of uniqueness
Less differentiation
Potential loss of current brand equity
Loss of discretion
Resistance to change (guests and management)
Increased marketing costs
Competition tougher among corporate branded
hotels
Change in the corporate culture is challenging
Slides:
1.
For Rosewood Hotels to successfully move from the canned and cookie cutter approach of
individual branding to a collective strategy of corporate branding, first the pros and cons have to
be weighed and measured. From the research conducted by Rosewood, the most obvious and
immediate pro to a corporate branding strategy is the projected increase in multiproperty stay
guests from 5% to 10%. This has the potential to not only increase revenues but also brand
awareness, recognition and word of mouth referrals.
Based on the calculations, as well as the overall pros and cons, I believe that Rosewood should
definitely move from individual brands to a corporate brand. That being said, the company
currently has some powerhouse locations under its overall corporate climate, such as the flagship
location, The Mansion on Turtle Creek in Dallas and also The Carlyle in New York. So as not to
lose any current brand equity in those properties, and also to appease the management of those
locations who are probably more resistant to the change to corporate branding than any other
locations, I would recommend a modified corporate umbrella plan using a combination of new
and existing brand elements. Rather than renaming The Carlyle to The Rosewood Carlyle, I
would recommend the name become The Carlyle, a Rosewood Property or something similar.
This will associate the properties with the Rosewood name without detracting from the brand
equity already built within the current naming framework. The changes to the corporate culture
will be difficult enough to traverse without adding undue stresses, and Rosewood definitely does
not want to alienate current customers with dramatic and immediate changes. All new properties
could be named under the Rosewood umbrella.
The company also needs to strive to establish the same service levels across all properties that
the patrons of locations like The Carlyle and The Mansion at Turtle Creek have come to expect.
Rosewood needs to maintain the core company philosophies and impeccable standards
established by Mrs. Hunt when she rescued The Mansion from demolition and made it the worldclass hotel and restaurant that it is today.

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Introduction to Rosewood:

In the luxury hotel business

like luxury competitors

growing at ~90% and still small

What is the value proposition of Rosewood?

as Hilton and Ritz

What is Rosewood doing?

and not well recognized.

What is the problem and why are we discussing?

does not stand in front of the likes of Hilton or Ritz

enjoyed 10-15% cross-property rates.

Other disadvantages associated with individual branding

Failure to take advantage of the scale- cost synergies

such as Hilton and Hyatt

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