CLTV (Without Branding)

Years/Particulars 0 1 2
No. of Nights per Stay 2 2 2
No. of stays per guest 1.2 1.2 1.2
Revenue per night ($) (increasing by 6% per year) 750 795 842.7
Revenue per customer ($) 1800 1908 2022.48

Gross Profit Per Customer ($)

(32% of Revenue per customer) 576 610.56 647.1936
Less:Cost to Acquire Customer 150
Less: Annual Marketing Cost (increasing by 3% every year) 130 133.9 137.917

Cash Flow from Customer if Retained (Net Profit in $) 296 476.66 509.2766
Probability of being retained 1.000 1.000 0.167
Discount Factor 1.00 0.92 0.85
Expected Cash Flow from Customer -150 438.53 71.86

NPV of CLTV $374.45

 3 4 5 6
2 2 2 2
1.2 1.2 1.2 1.2
893.262 946.8577 1003.669 1063.889 Retention Rate 16.67%
2143.829 2272.459 2408.806 2553.334

686.0252 727.1867 770.8179 817.067

142.0545 146.3161 150.7056 155.2268

543.9707 580.8706 620.1123 661.8402

0.028 0.005 0.001 0.000
0.78 0.72 0.66 0.61 Discount Factor 8.00%
11.77 1.93 0.32 0.05
 CLTV Model (With Branding)
Years/Particulars 0
No. of nights per stay 2
No. of stays per guest 1.3

Revenue per night ($) 750

Revenue per customer ($) 1950

Gross Profit Per Customer ($) 624

(32% of Revenue per customer)

Less:Cost to Acquire Customer 150

Less: Annual Marketing Cost (increasing by 3% per year) 138.7

Cash Flow from Customer if Retained (Net Profit in $) 335.3

Probability of being retained 1.000

Discount Factor 1.00
Expected Cash Flow from Customer -150

NPV of CLTV $456.13

Increase in NPV of CLTV $81.68

Increase in profit $9,393,031.74

Increase in Revenue from branded Rosewood $29,353,224.17

[Increase in profit/Gross Margin (32%)]
h Branding)
1 2 3 4 5 6
2 2 2 2 2 2
1.3 1.3 1.3 1.3 1.3 1.3

795 842.7 893.26 946.86 1003.67 1063.89

2067 2191.02 2322.476 2461.836 2609.542 2766.114

661.44 701.1264 743.1923 787.7875 835.0534 885.1565

0 0 0 0 0 0

142.861 147.1468 151.5612 156.1081 160.7913 165.6151

518.579 553.9796 591.6311 631.6794 674.2621 719.5414

1.000 0.217 0.047 0.010 0.002 0.000

0.92 0.85 0.78 0.72 0.66 0.61
477.09 101.61 21.63 4.60 0.98 0.21
 Total number of multiproperty guests with branding
5750 * 2 = 11500

Annual Marketing Cost per customer:

[(total number of guests * Average cost of marketing per guest in 2003)
+ 1000,000] / Total number of repeat guests
(115000 * 130) + 1000000/ 115000 138.7

Total number of repeat guests with branding

Total number of multi-property stay guests without branding (5750)

+ Total number of repeat guests without branding (19169)
= Total number of repeat guests with branding (24919)

Average guest retention rate

24919 of 115000 0.2167

 CLTV (Without Branding)
Years/Particulars 0 1 2
No. of Nights per Stay 2 2 2
No. of stays per guest 1.2 1.2 1.2
Revenue per night ($) (increasing by 6% per year) 750 795 842.7
Revenue per customer ($) 1800 1908 2022.48

Gross Profit Per Customer ($)

(32% of Revenue per customer) 576 610.56 647.1936
Less:Cost to Acquire Customer 150
Less: Annual Marketing Cost (increasing by 3% every year) 130 133.9 137.917

Cash Flow from Customer if Retained (Net Profit in $) 296 476.66 509.2766
Probability of being retained 1.000 0.167 0.028
Discount Factor 1.00 1.08 1.17
Expected Cash Flow from Customer 296.00 73.57 12.13

NPV of CLTV $384.10

 3 4 5 6
2 2 2 2
1.2 1.2 1.2 1.2
893.262 946.8577 1003.669 1063.889 Retention Rate 16.67%
2143.829 2272.459 2408.806 2553.334

686.0252 727.1867 770.8179 817.067

142.0545 146.3161 150.7056 155.2268

543.9707 580.8706 620.1123 661.8402

0.005 0.001 0.000 0.000
1.26 1.36 1.47 1.59 Discount Factor 8.00%
2.00 0.33 0.05 0.01
 CLTV Model (With Branding)
Years/Particulars 0 1
No. of nights per stay 2 2
No. of stays per guest 1.3 1.3
Revenue per night ($) 750 795
Revenue per customer ($) 1950 2067

Gross Profit Per Customer ($) 624 661.44

(32% of Revenue per customer)

Less:Cost to Acquire Customer 150 0

Less: Annual Marketing Cost (increasing by 3% per year) 138.7 142.861

Cash Flow from Customer if Retained (Net Profit in $) 335.3 518.579

Probability of being retained 1.000 0.217
Discount Factor 1.00 1.08
Expected Cash Flow from Customer 335.30 104.05

NPV of CLTV $479.77

Increase in CLTV $95.67

Increase in profit $11,001,558.84
ing)
2 3 4 5 6
2 2 2 2 2
1.3 1.3 1.3 1.3 1.3
842.7 893.26 946.86 1003.67 1063.89
2191.02 2322.476 2461.836 2609.542 2766.114

701.1264 743.1923 787.7875 835.0534 885.1565

0 0 0 0 0

147.1468 151.5612 156.1081 160.7913 165.6151

553.9796 591.6311 631.6794 674.2621 719.5414

0.047 0.010 0.002 0.000 0.000
1.17 1.26 1.36 1.47 1.59
30.34 7.58 1.90 0.47 0.12
 Total number of multiproperty guests with branding
5750 * 2 = 11500
Annual Marketing Cost per customer:
[(total number of guests * Average cost of marketing per guest in 2003)
+ 1000,000]
(115000 / Total
* 130) number115000
+ 1000000/ of repeat guests 138.7

Total number of repeat guests with branding

Total number of multi-property stay guests without branding (5750)

+ Total number of repeat guests without branding (19169)
=Total number of repeat guests with branding (24919)

Average guest retention rate

24919 of 115000 0.2167