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Rosewood Hotels & Resorts: Customer Lifetime Value (CLTV) Analysis Inputs

This document compares the customer lifetime value (CLTV) analysis for Rosewood Hotels & Resorts with and without corporate branding from 2003-2009. Key metrics like average daily spend, retention rates, and marketing expenses are provided. The analysis shows that with corporate branding, Rosewood sees higher revenue per night, profit per customer, and cumulative net present value over the period. Additionally, corporate branding results in more repeat guests and multi-property stays compared to without branding.

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Vishal Goyal
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Download as PDF, TXT or read online on Scribd
437 views

Rosewood Hotels & Resorts: Customer Lifetime Value (CLTV) Analysis Inputs

This document compares the customer lifetime value (CLTV) analysis for Rosewood Hotels & Resorts with and without corporate branding from 2003-2009. Key metrics like average daily spend, retention rates, and marketing expenses are provided. The analysis shows that with corporate branding, Rosewood sees higher revenue per night, profit per customer, and cumulative net present value over the period. Additionally, corporate branding results in more repeat guests and multi-property stays compared to without branding.

Uploaded by

Vishal Goyal
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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ROSEWOOD HOTELS & RESORTS: CUSTOMER LIFETIME VALUE (CLTV) ANALYSIS

Inputs
Without With Sourcce
Rosewood Rosewood
Branding Corporate
(2003) Branding

Total Number of Unique Guests 1,15,000 1,15,000 Exhibit 8


Average Daily Spend $750.00 growing
$750.00 at 6% Exhibit 8
Number of Days Average Guest Stays per Stay 2.0 2.0 Exhibit 8
Average Gross Margin per Room 32% 32% Exhibit 8
Average Number of Visits per Year per Guest 1.2 1.3 Exhibit 8
Average Marketing Expense per Guest (system-wide) $130.00 growing
$138.70 at 3% Exhibit 8
Average New Guest Acquisition Expense (system-wide) $150.00 $150.00 Exhibit 8
Total Number of Repeat Guests 19,169 24,919
of which: Total Number of Multi-property Stay Guests 5,750 11500
Additional Costs Required per annum $10,00,000 Page 5
Discount Rate 8% 8% Exhibit 8
Average Guest Retention Rate 16.67% 21.67%
Without Branding 2003 2004 2005 2006 2007 2008 2009

Revenue per night 795.0 842.7 893.3 946.9 1003.7 1063.9


Gross profit per customer 610.6 647.2 686.0 727.2 770.8 817.1
One-time acquisition cost -150.0
Marketing expense per customer -133.9 -137.9 -142.1 -146.3 -150.7 -155.2

Net Profit per customer in year -150.0 476.7 509.3 544.0 580.9 620.1 661.8
Cumulative retention rate 1.00 0.17 0.03 0.00 0.00 0.00
Profit per customer in year (if retained) -150.0 476.7 85.0 15.2 2.7 0.5 0.1
Cumulative discount rate 1.00 0.93 0.86 0.79 0.74 0.68 0.63
Net present value in year -150.0 441.4 72.9 12.0 2.0 0.3 0.1
Cumulative NPV -150.0 291.4 364.3 376.3 378.3 378.6 378.7

2003 2004
Revenue per night 750 795 ($750*1.06) for next year
Retention rate 16.6687 Percent
Annual discount rate 8 Percent
Average gross margin 32 Percent
Average spend/purchase 1590 $
Number of purchases per year 1.2 Times
Marketing costs per customer per year 130 133.9 ($130*1.03) for next year
Acquiring new guest 150 $
Total number of Customers 115000
Average revenue 610.56 $
With Branding 2003 2004 2005 2006 2007 2008 2009

Revenue per night 795.0 842.7 893.3 946.9 1003.7 1063.9


Gross profit per customer 661.4 701.1 743.2 787.8 835.1 885.2
One-time acquisition cost -150.0
Marketing expense per customer -133.9 -137.9 -142.1 -146.3 -150.7 -155.2
Additional Marketing expense per customer -8.69 -8.95 -9.22 -9.50 -9.78 -10.07
Net Profit per customer in year -150.0 518.9 554.3 591.9 632.0 674.6 719.9
Cumulative retention rate 1.00 0.22 0.05 0.01 0.00 0.00
Profit per customer in year (if retained) -150.0 518.9 120.3 27.9 6.5 1.5 0.3
Cumulative discount rate 1.00 0.93 0.86 0.79 0.74 0.68 0.63
Net present value in year -150.0 480.4 103.1 22.1 4.7 1.0 0.2
Cumulative NPV -150.0 330.4 433.5 455.7 460.4 461.4 461.6

Retention rate 21.6687 Percent


Annual discount rate 8 Percent
Average gross margin 32 Percent
Average spend/purchase 1500 $
Number of purchases per
year 1.3 Times
Marketing costs per customer per year 138.7 $
Acquiring new guest 150 $
Total number of Customers 115000
Average revenue 624 $
Cost per customer (additional) 8.695652 $

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