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As Rosewood Hotels & Resorts Extends its Global Reach, More Emphasis
 Being Put on the Rosewood Brand; Expect to Have 20 Properties by 2008

By Suzanne Marta, The Dallas Morning NewsMcClatchy-Tribune Business News

Sep. 19, 2006 - Rosewood Hotels & Resorts LLC, parent of The Mansion on Turtle Creek, is extending its reach across the globe.

In the last year, it's added four luxury properties to its portfolio.

Five more are on the way.

But when the Dallas-based operator of luxury hotels opens its newest resort in Mexico's Maya Riviera next year, customers will see something they may not have noticed before: the Rosewood name.

It will be called the Rosewood Mayakoba. So, too, with a new resort in Menlo Park, Calif.: the Rosewood Sand Hill, which breaks ground next month.

For 27 years, Rosewood has sought to build a global reputation with iconic properties so distinct -- landmarks as different as the Mansion in Dallas and the Carlyle in New York -- that they could stand on their own name.

But as the company extends its global reach, it's putting more of an emphasis on the Rosewood brand.

Since 2004, the more established properties have been getting Rosewood in their names as tag lines, as in The Mansion on Turtle Creek, A Rosewood Hotel.

Telephone callers to the hotels also have begun to hear the Rosewood name.

Connecting dots

"Connecting the dots between our properties was getting difficult," said Robert Boulogne, Rosewood's chief operating officer.

Those connections help drive revenue, Mr. Boulogne said.

"When a customer has a great experience at one property, we want them to know that they can also have a great experience at our other properties."

Company officials note they have built the company on distinctive properties, and they have no intention of turning Rosewood into a chain where all the properties look the same.

So far, the plan is working well, with the shift in strategy yielding some noticeable results.

News stories about individual hotels now mention the Rosewood name, which seldom happened before two years ago.

Distinct identities were "great for the individual properties," Mr. Boulogne said, "but it didn't give people the idea that this great experience could be at all of these other places, too."

Repeat traffic

The change has also helped boost repeat traffic across the Rosewood portfolio.

Before the branding effort, fewer than 5 percent of Rosewood customers had stayed in more than one of its properties, even though some properties enjoyed return visits from up to 40 percent of customers.

Rosewood officials declined to disclose details about how much additional repeat business they're getting now, but they said they'd like it to increase to 20 percent.

The soft marketing also helped attract developers during an expansion boom for the industry.

"It's the busiest we've ever been," Mr. Boulogne said.

Officials are working with developers for hotels in Telluride, Colo.; Costa Rica; Tahiti; and other visitor hotspots.

Each of the projects includes residential condos, and "they all want to use the Rosewood name," he said.

By 2008, when projects currently under construction will be complete, Rosewood will have grown to 20 properties, up from 12 in 2004.

Demand for luxury lodging has been steadily growing over the last five years, pushing up room rates and revenue.

But as a growing number of those properties include a residential component, the brand takes on more importance.

More visibility

By placing the brand prominently in a hotel's name, Rosewood will be able to accelerate the visibility of its portfolio, said Mark Woodworth, executive managing director for PKF Hospitality Research in Atlanta.

Research by PKF shows that condo projects associated with a hotel attract a premium of 10 percent to 40 percent per square foot -- an important factor because most developers rely on the profits from residential units.

"The more well-known the brand, the closer to the high end of this range a project will fall," Mr. Woodworth said.

Top brands, such as the Four Seasons Hotels and Resorts and Marriott International Inc.'s Ritz-Carlton, "have captured the lion's share" of the high-end hotel/residential projects completed, he said.

The development boom has attracted new players and competition, creating a sense of urgency to put Rosewood's stake more firmly in the ground.

While Rosewood is growing, it's still tiny compared with others in its peer group, such as the Four Seasons and the Ritz-Carlton.

"Those brands are getting very big," Mr. Boulogne said. "Rosewood has an opportunity to offer something different."

Investing in luxury hotels "is in vogue," said Atef Mankarios, a Dallas-based consultant specializing in high-end hotel management and development who spent 14 years with Rosewood. He also has had tenures with the Four Seasons and St. Regis brands.

"This market is going to get crowded, and you have to differentiate yourself," he said.

But Mr. Mankarios isn't a fan of applying a single brand to multiple hotels at the high-end of the market.

"I wish them success, but it's not what I would do," he said.

Mr. Mankarios pointed to Orient-Express Ltd., a privately held management company that has resisted branding its approximately 40 hotels and resorts.

The best

"Each of its properties is the best in the marketplace, and each is iconic and successful," he said.

The proliferation of travel shows that feature luxury hotels, not to mention magazines and Internet sites, have made it easier for independent properties to reach their customers, Mr. Mankarios said.

"It doesn't matter what flag is flying, what matters is how good the experience is," he said.

The push toward branding is coming from developers, Mr. Mankarios said, who sees a brand as a sort of safety net.

Not critical

But he disagrees that branding is critical to driving sales at the luxury level.

"We're not dealing with the midmarket with $200-a-night rates. We're talking about $600 and $700 average rates and that customer is very different," Mr. Mankarios said.

"Those customers want a unique and distinctive experience."

Better name recognition wasn't just important to attracting developers.

Travel agents looking to book vacations for affluent customers didn't always recognize that the hotels in Rosewood's portfolio were under the same management.

"Some people thought we were just a representation firm like 'Leading Hotels of the World,' " he said.

The company also created its own Rosewood global distribution code, and central toll free reservations line, to make it easier to pitch business to travel agents.

Despite the changes at the new properties, Rosewood's most established hotels, such as Dallas' Mansion and Crescent Court Hotel, won't be getting a name change.

"It isn't respectful to the property or its history," Mr. Boulogne said.

But at the same time, "I don't want anyone to leave one of our hotels and not know it was a Rosewood," Mr. Boulogne said.



Copyright (c) 2006, The Dallas Morning News

Distributed by McClatchy-Tribune Business News. For reprints, email, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. NYSE:FS,

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