ROSEWOOD HOTELS CLTV
ROSEWOOD HOTELS: CUSTOMER LIFETIME
VALUE (CLTV) ANALYSIS
The calculation below confirms that when following the corporate branding/strategy could be beneficial for Rosewood hotels.
ROSEWOOD HOTELS & RESORTS:
CUSTOMER LIFETIME VALUE (CLTV) ANALYSIS
Without
Rosewood
Branding
Total number of unique Guests
With Rosewood
Corporate
Branding
115,000.00
115,000.00
$750
$750
2
2
32%
32%
1.2
1.3
Average Marketing expense per guest (system-wide)
$130
$138.70
Average new guest acquisition (system wide)
$150
$150
19,169
24,920
5750
11500
8%
8%
16.67%
21.70%
Average gross Profit Guest
$576
$624
CLV Calculation Without Corporate Brand strategy
2003
2004
Average daily Spend
Number of days average guest per stay
Average gross margin per room
Average number of visits per year per guest
Total number of repeat guests (s) of which: Total number of multi-property stay guests
Discount Rate
Average Guest Retention Rate (f)
# of Nights per stay
2
# of Stays per guest
1.2
Revenue per Night
$795
Revenue per Customer
$1,908
Gross Profit per customer
$610.60
Cost to acquire customer
$150
Marketing cost per customer
Cash flow retained customer
133.9
($150)
476.66
1
1
Percentage probability of retention
Expected Cash flow from customer
Discount factor
NPV of cash flow
NPV of CLTV
CLV Calculation With Corporate Brand strategy
0
($150)
476.66
1
0.926
($150)
441.35
$378.49
2003
2004
# of Nights per stay
2
# of Stays per guest
1.3
Revenue per Night
$795
revenue per Customer
$2,067
Gross Profit per customer
$661.40
Cost to acquire customer
$150
Marketing cost per customer
$133.90
Additional Marketing Cost per customer
$8.96
Cash flow retained customer
$518.58
Percentage probability of retention
1
1
Expected Cash flow from customer
($150)
518.58
1
0.926
($150)
480.17
Discount factor
NPV of cash flow
NPV of CLTV
$461.09
Based on the Customer Lifetime Value (CLV) calculations, there is incremental value when
VALUE (CLTV) ANALYSIS
The calculation below confirms that when following the corporate branding/strategy could be beneficial for Rosewood hotels.
ROSEWOOD HOTELS & RESORTS:
CUSTOMER LIFETIME VALUE (CLTV) ANALYSIS
Without
Rosewood
Branding
Total number of unique Guests
With Rosewood
Corporate
Branding
115,000.00
115,000.00
$750
$750
2
2
32%
32%
1.2
1.3
Average Marketing expense per guest (system-wide)
$130
$138.70
Average new guest acquisition (system wide)
$150
$150
19,169
24,920
5750
11500
8%
8%
16.67%
21.70%
Average gross Profit Guest
$576
$624
CLV Calculation Without Corporate Brand strategy
2003
2004
Average daily Spend
Number of days average guest per stay
Average gross margin per room
Average number of visits per year per guest
Total number of repeat guests (s) of which: Total number of multi-property stay guests
Discount Rate
Average Guest Retention Rate (f)
# of Nights per stay
2
# of Stays per guest
1.2
Revenue per Night
$795
Revenue per Customer
$1,908
Gross Profit per customer
$610.60
Cost to acquire customer
$150
Marketing cost per customer
Cash flow retained customer
133.9
($150)
476.66
1
1
Percentage probability of retention
Expected Cash flow from customer
Discount factor
NPV of cash flow
NPV of CLTV
CLV Calculation With Corporate Brand strategy
0
($150)
476.66
1
0.926
($150)
441.35
$378.49
2003
2004
# of Nights per stay
2
# of Stays per guest
1.3
Revenue per Night
$795
revenue per Customer
$2,067
Gross Profit per customer
$661.40
Cost to acquire customer
$150
Marketing cost per customer
$133.90
Additional Marketing Cost per customer
$8.96
Cash flow retained customer
$518.58
Percentage probability of retention
1
1
Expected Cash flow from customer
($150)
518.58
1
0.926
($150)
480.17
Discount factor
NPV of cash flow
NPV of CLTV
$461.09
Based on the Customer Lifetime Value (CLV) calculations, there is incremental value when