Tulip Hotels &

Resorts

About Tulip Group

Privately owned 5 star hotel management company operating a
collection of individually branded luxury iconic hotels
12 hotels with 1513 rooms capacity
Faces competition from hotels with corporate branding and
individually branded unique hotels as well
Follows Sense of Palace philosophy by tailoring experience
around local culture, architecture, history and location

Why is Tulip considering a new brand

strategy?
Recognition of Tulip as a brand was very low
This meant brand wise usage and cross selling of different hotels under
same brand was not possible
Return visits and cross selling in individual brands was 5-10% while in
chain of hotels under one corporate brand was 10-15%
Tulip wad not recognized as a status symbol/luxury brand like corporate
brands of Four Season etc. Getting only a sub-set market in luxury
brands/market
Customer segment targeted usually value distinctive, exclusive
collection hotel Philip Maritz, Chairman BOD
Tulip logo on low-profile amenities and hotel logo on high-profile
amenities makes Tulip seem like some low end brand of hotel suppliers
Untapped opportunity for increasing cross property usage

Pros and Cons of moving from an Individual Brand

to a Corporate Brand
Pros

Cons

Projected increase in multi-property stay

guests from 5% to 10%

Loss of uniqueness and differentiation

Increase in revenue, brand awareness,

recognition and word of mouth referrals,
especially since Tulip brand-wide usage
among guests and was an untapped asset

Potential loss of current brand equity

Alienating guests at well-established
properties such as the Carlyle or the
Mansion

Good positioning for competition

Increased marketing costs

Increased market share due to higher brand

recognition

Change in the corporate culture is

challenging; individual hotel managers
feel their autonomy would be threatened

Promotion of cross-property usage of 10-15%

Increase in customer lifetime value
Provide consistent experience

Sense of place philosophy will need

increased attention

Branding Strategy
Corporate
branding

Individual
branding

Will corporate branding maximise revenues?

Encourage guests to use more services
Better Brand Recognition and brand recall
Collective experience - sense of association with the brand across
categories & hotels
Consistent services
Higher customer loyalty
Individual Brands/collective hotels: 5-10% cross selling rates
Corporate Brand 10-15% cross property usage rates

Revenue and Cost Analysis

Without Rosewood Branding (2003) With Rosewood Corporate
Branding

Total number of unique guests (a)

Average daily spend (b)
Number of days average guest stays
Average gross margin per room
Average number of visits per year per guest
Average marketing expense per guest
(system-wide) d
Average new guest acquisition expense
(system-wide)
Total number of repeat guests (e)
Of which: Total number of multi-property stay
guests
Number of Multiproperty Guest
Average Guest Retention Rate (f)
Average Gross Profit per Guest

115,000.00
$750.00
2
32%
1.2

115,000.00
$750.00
2
32%
1.2

$130.00

$138.70

$150.00

$150.00

19,169

24,919

5,750

11,500

5%
16.67%
$576.00

10%
21.67%
$624.00

CLV as metric to forecast business potential from

a customer
Customer lifetime value in marketing is the net present value of
the cash flows that you will realize on the average customer during
a given number of years.
The use of customer lifetimevalue :
Marketing metric that tends to place greater emphasis on

1. Customer service and long-termcustomer satisfaction

2. Not emphasize on maximizing short-term sales
3. To identify profitable customers
4. To develop strategies to target customers

Calculating CLV
STEPS:
1. Forecasting of remaining customer lifetime (most often in
years)
2. Forecasting of future revenues (most often year-by-year), based
on estimation about future products purchased and price paid
3. Estimation of costs for delivering those products
4. Calculation of the net present value of these future amounts
Formula (Not used in this case)
(Avg Monthly Revenue per Customer * Gross Margin per Customer)
Monthly Churn Rate

Calculating CLV

3000
2500
2000
1500
1000
500

0
CLV without corporate
branding
CLV with corporate
branding

2003

2004

2005

2006

2007

2008

2009

317

640

966

1296

1628

1963

2299

364

731

1102

1475

1850

2226

2603