The marketing and management teams for Rosewood hotels have been faced with a branding issue. The leaders with Rosewood have realized that their brand, “Rosewood” has failed to make a true name for itself in the luxury hotel industry. They feel that in order to boost customer awareness they should attach the Rosewood name to each hotel. Rosewood felt that there was a major disconnect between the 12 hotels they have all over the world.
Customers were returning to the same properties, but rarely would experience their different properties, and the management team is blaming their lack of brand awareness globally. There are concerns with this new strategy to attach the Rosewood name to all of their advertising and hotels, but over all John Scott, Rosewood’s CEO, believes that this new approach could definitely boost revenue and customer profitability. Concerns Rosewood takes pride in that they are not your typical hotel chain.
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They value the location at which the property exists and they embed the local culture of their location into everything they do, from architecture to customer services. Because of this, it is hard to accept this new branding strategy right away being that if they are trying to stay away from the “chain-like” feel, if they attach a name to all of them over the world you can’t help but feel that it’s a commercialized franchise. If they do follow through with this brand strategy it could push away customers who preferred the authentic and unique feel of their hotel.
Phillip Maritz, chairman of Rosewood’s board, argues that despite these customers who prefer the original feel of a collection, the majority of the luxury market preferred the corporate brand. Analysis Rosewood should without a doubt proceed with this new brand strategy. Yes, their “reason for being” is their diverse, unique and cultural hotels, and they shouldn’t change that, however adding their name in front of these already branded hotels wouldn’t alter the actual hotel.
This would actually put give customers awareness of who exactly owns these hotels. If loyal customers of one of Rosewood’s properties travel to another location where another Rosewood property exists and recognizes that Rosewood’s name they will more likely than not remain loyal to that brand and stay there. According to Exhibit 5, it shows that over the years 2001, 2002 and 2003, the Ritz-Carlton had 4 to 10 percent greater occupancy than Rosewood, and they use corporate branding.
In Exhibit 7, a travel agent was explaining that customers “may know the name (Rosewood), but there are no positive connotations like there are for Four Seasons- maybe 60% know the actual name. ” This is a big issue for Rosewood. In order to compete in a growing market of luxury hotels, their brand absolutely MUST be recognized. The general mass of luxury hotel customers prefers the corporate name brand, and Rosewood would be making a big mistake if they don’t implement this new brand strategy.
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