Introduction
“Rosewood Hotels & Resorts” is a world-famous organization whose activities are focused on hospitality and lifestyle management. To date, the company owns 41 hotels in 19 countries and will not stop at the results performed (Our brands, n.d.). It is noteworthy that Rosewood’s current success has been achieved through long and painstaking work over several years. It is known for sure that 2004 was a period of prosperity and revival for the firm, which allowed Rosewood to gain recognition among guests and outstrip some competitors in the hotel business. This paper aims to analyze and research the strategic concepts of Rosewood Hotels & Resorts that have changed the image and reputation of the company.
The Strategic Starting Position
One should remark that Rosewood’s strategic starting position at the beginning of 2004 was based on corporate branding tactics in terms of taking into account the individual characteristics of each hotel and the approach to guests. This strategic model actively appealed to advanced communication and innovation aspects in order to expand the company’s activities and include the brand in the name of each hotel (Dev & Stroock, 2007). Improving the company’s reputation and increasing the retention of guests were among the priority goals of the project. Based on the situation and the circumstances, the specialists needed to use the available methods and means to achieve a positive attitude of clients to Rosewood, which would attract customers but not repel them.
It is known that a corporate brand allowed Rosewood to ensure consistency and uniformity of various types of communications and actions. Through this, the company demonstrated and facilitated the understanding of the organization’s vision, values, mission, and culture. Moreover, the corporation has developed a clear and attractive brand promise for all interested groups, established strong customer relationships, and created a balance between global brand awareness and adaptation to local market features. The new strategy was crucial in boosting the company’s growth by providing a platform for encouraging guests at one property of Rosewood to visit other hotels and resorts under the firm’s name.
A New Branding Strategy: Explanation
Several factors and reasons made Rosewood consider a new branding strategy. The lack of differentiation of the company from “opponents,” the low share of recognition and honor among customers, and the presence of unspent opportunities for improvement, development, and expansion of the firm are the principal moments when Rosewood decides to adopt a new approach. Moreover, the company’s report from 2003 further confirmed this information and convinced Rosewood’s management to adopt a consensus on strategic planning and management of the organization (Dev & Stroock, 2007). Therefore, the highly developed competitive environment in the field and the low percentage of repeat attendance, in a sense, have become a lever of pressure for making cardinal decisions. Moreover, the specifics and interest of the corporation in corporate branding were primarily determined by trends in the modern market economy to match the 21st century. Hence, in the new conditions of complicated consumer preferences, corporate branding has become an integral element of the company’s marketing strategy, striving to achieve and maintain leadership positions in the market.
The number of visitors increased every year, but only a few customers understood, realized, and perceived the name, mission, and goals of the hotels in which they rested. According to Scott and Boulogne, concentrating on individual real estate brands did not bring tangible effects and stable results, and guests more often identified themselves with other, more substantial firms in the hotel business (Dev & Stroock, 2007). These leaders sought to create a unique environment and experience for each hotel, making Rosewood stand out from other luxury inns. Each property made a fantastic guest experience: the procedures, meals, programs, and architecture were different from the other hotels under Rosewood. Consequently, due to these two persons’ knowledge, talents and abilities, Rosewood managed to avoid undesirable consequences and reach certain heights in the field by adopting a new strategy.
Comparative Analysis
A Competitor View
The comparative characteristics of a wide range of essential indicators of well-known luxury hotels presented in the briefcase by Harvard Business Publishing demonstrated the following significant aspects. Primarily, Rosewood, as an organization focused on individually branded properties, showed high rates in terms of the number and growth of real estate up to 2003 (Dev & Stroock, 2007). Nevertheless, in the table presented, Orient Express “overtook” its “opponent” in the race for leadership positions. In addition, starting in 2001 and ending in 2003, Rosewood had the highest percentage of average daily room rate (ADR) and the excellent rating of hotels and resorts (RevPAR) against the background of such famous organizations as Four Seasons, Ritz-Carlton, and Orient-Express (Dev & Stroock, 2007). Anyway, Rosewood lost out to competitors regarding occupancy rate and the number of rooms.
Differentiation
Luxury Chains are groups of hotels connected in a certain way; as a rule, they belong to the same company or owner. In most cases, these hotels operate under the same name, and most internal processes have a similar structure, essence, and content. Accordingly, Collection Hotels are groups of hotels operating independently under the same name. In these inns, a number of some structural elements differ from other hotels under the same brand. Usually, guests of Collection Hotels are people who want to participate in a unique experience every time they visit another resort.
Advantages and Disadvantages
It is no secret that the corporate branding strategy has brought Rosewood success, wealth, and well-being with prospects for the future. Primarily, switching to a corporate brand means that people will begin to attribute the brand’s special, bright, and unique features, encouraging new guests to stay in several brand facilities. Accordingly, recognizing Rosewood among other hotels will allow loyal customers to visit more inns under the same name. Since Rosewood was already a well-established firm, such conversion would have developed faster since it would not have started from scratch. In addition, the organization will extend to all its operational aspects, such as callback signals and room service. Rosewood will develop valuable products that could be offered in adjacent properties, distinguishing them from competitors. As soon as the brand is fully developed and people accept it, Rosewood will ensure high customer retention, and the number of regular clients will increase.
Nevertheless, Rosewood faced the following disadvantages when switching to a corporate brand. For instance, low brand recognition among people worked against Rosewood’s brand development. In this case, one should assume that guests are more likely to have visited the hotels without associating it with the specific brand. Furthermore, making the firm known to individuals will use more resources and time. For example, the luxury sector is crowded with big companies like Four Seasons, Ritz-Carlton, St. Regis, and many others; it is not easy to position Rosewood, as this will require a lot of advertising. As practice shows, most customers like to identify themselves with well-known brands, opposing individual ones. J. Scott claims that Rosewood is focused on a subsection of the luxury market, which has been working against the business (Dev & Stroock, 2007). There is a need for Rosewood to address a larger share of “the opulence market.”
The high initial cost of advertisement and rebranding and the cost of acquiring the best customer may be increased; there is uncertainty about how positively or negatively the rebranding will affect the corporation. Coping up with internal and external influences is part of strategic company branding and unpredictability in a firm’s environment, as well as its employee capacity to cope with these challenges, driving strategic corporate branding. External uncertainty may be caused by the company’s vision, market brands, and participation in political and social forces. Raised ambiguity will certainly heighten scrutiny of the firm’s behavior.
The CLV and the Total Revenue
According to the data provided, one can confidently emphasize that shifting to a corporate brand will positively affect Rosewood’s relationship with customers and the income received. Firstly, adopting a specific strategy will significantly allow the organization to achieve excellent customer lifetime value (CLV). It is assumed that this procedure would dramatically bring better financial benefits and reputation than a project aimed at promoting, PR, and advertising the brand. The number of guests staying in 2004 should double by about 5% compared to the statistics for 2003 (Dev & Stroock, 2007). Furthermore, the average percentage of repeated hotel visits will grow by about 0.1% (Dev & Stroock, 2007). Secondly, making such an important decision will allow Rosewood to cover operating expenses by one million dollars annually, increasing the firm’s total revenues. Consequently, spending on marketing campaigns will rise by 3%, and total revenues by 6% per year (Dev & Stroock, 2007). Indeed, one should comprehend that such judgments are not conclusive and objective assessments of the intended outcomes. Hence, evaluating “the client’s life cycle” and the corporation’s total revenue is based on an investigation of available facts and Rosewood’s management expectations.
In brief, a corporate brand will advance Rosewood’s awareness and the influx of new customers and “regulars” of hotels. In this case, a certain guarantee of the quality of the services provided and the justified costs of living in the company’s hotels is implied. Thus, the properties “under the wing” of Rosewood will allow more people to identify themselves with the brand and its hotels. In general, Rosewood promises good customer relationships based on discounts for guests, such as loyalty points for frequent stays and a high probability of retaining clients through the development of a well-known corporate brand. Therefore, a well-thought-out brand promotion tactic within the framework of corporate branding will have more potential opportunities for differentiation, and the brand itself can become a source of sustainable competitive advantage.
Recommendations
Rosewood is recommended to adhere to the following valuable tips and recommendations to maintain competitive advantages and positions. Firstly, the brand name should always be posted at the entrance to each building. Basically, a consumer’s choice is determined not only by the assessment of the functional advantages of the organization’s activities but also by the holistic perception of the company — services, corporate design and style, corporate communication, skills, attitudes, and behavior of employees, and the entire culture of the corporation as a whole. Hence, Rosewood logos must be applied to all furniture, bedding, dinnerware, and exterior decoration, allowing people to recognize the brand and associate it with hotels. Secondly, the company should focus on implementing and developing customer loyalty in terms of the effectiveness of this program in all real estate. Guests must be able to exchange the points they receive for specific services in Rosewood.
Thirdly, the management of Rosewood properties should be centralized; all hotel owners should transfer control to a central manager. Thus, this will help synchronize the activities of all the corporation’s objects. Fourthly, more “aggressive” brand promotion should be encouraged through advertising, more significant events, and prominent, well-known staff. Fifthly, the names of the rooms should include attractions in the vicinity of famous people. Locals are inspired and feel involved when they are near rosewood properties.
Conclusion
Summarizing the above, it is necessary to draw the following conclusions about the analysis of the strategic concepts of Rosewood Hotels & Resorts. Today, Rosewood is one of the most well-known companies worldwide, providing high-quality services in the hotel business. Since 2004, Rosewood has been focusing on the corporate branding strategy, which has allowed the firm to expand and improve its customer base, take leading positions in the field and increase total revenue. Accordingly, the company was able to solve the accumulated issues, directing strategic decisions in the right way. Nonetheless, Rosewood faced such disadvantages when switching to corporate branding as the need for more effort, resources, and time to “build up powers.” Thus, in order to avoid such “troubles,” the corporation is recommended to resort to some recommendations based on the brand designation, loyalty program, centralized management, “aggressive” marketing, and properties.
References
Dev, C.S., & Stroock, L.M. (2007). Rosewood hotels and resorts: Branding to increase customer profitability and lifetime value. HBS No. 2087-PDF-ENG. Web.
Our brands. (n.d.). Rosewood Hotel Group. Web.