Rosewood Hotel Case Analysis

Rosewood Hotel Case

Background

Rosewood Hotel & Resort was an International hotel and resort management company, established in 1979 by Caroline Rose Hunt Trust Estate. Rosewood Hotel & Resort was known for successful conversion of existing properties and creation of one-of-a-kind ultra-luxury hotels. As 2003, Rosewood had 12 hotels worldwide (1513 rooms) with wide price range. Each hotel was designed to provide special experience in each given location and reflect the local culture and character. The unique boutique hotels and “A Sense of Place” design was what differentiated Rosewood from its competitors. However, hotel customers were not making positive connection between individual properties and the Rosewood brand. Rosewood has only 5% cross-selling rates, which was the lowest among individual branded hotels (5%-10%) as well as corporate branded hotels (10%-15%). Rosewood hotels have low brand awareness and Rosewood brand was shown discreetly on advertisements. Rosewood was competing in the luxury segment with two groups of luxury hotels: the corporate branded Ritz-Carlton, four seasons, St. Regis, one & only, mandarin oriental hotels and individual branded hotels. Rosewood was constantly facing increased competition pressure. In order to compete in the industry, Rosewood must change their branding strategy considering long-term profitability and lifetime value.

Managerial Issues

Rosewood was committed to delivery unique, one-of-a-kind, luxury hotel experience to its customers. Rosewood hotels featured “ A Sense of place” concept that incorporate local character and culture into hotel’s architecture design, interior and culinary service. Individual hotels provide different atmosphere and experience to its guests. The “A Sense of Place” concept was what differentiated Rosewood from other competitors. However, some problems arose with individual hotel branding strategy.

Rosewood Hotels & Resort has been doing “soft” branding of the Rosewood name on low-profile amenities. Discreet brand advertisements led to poor brand awareness (less than 5% people know Rosewood brand) and thus increased difficulties competing with other luxury hotel chains. Customers were not able to link their pleasant experience with the Rosewood brand, resulting in low cross-selling rate.

As luxury hotel segment became increasingly competitive, Rosewood Hotel & Resort management must consider a new brand strategy.

Strategic direction/ Pros and Cons

Individual Brand Strategy vs. Corporate Branding Strategy

Individual

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