All of the buzzwords are here in CEO Sonia Cheng’s strategy — from co-working and community to recognition and technology — but can Rosewood continue to maintain its uniqueness, even as it goes after what all the other hotel brands are going after, too? Given its track record, it just might.
It’s only been eight years since the former New World Hospitality group — a division of the larger Hong Kong-based conglomerate Chow Tai Fook Enterprises — purchased luxury brand Rosewood Hotels for $229 million. And in that time, Rosewood Hotel Group CEO Sonia Cheng has made it her singular goal to take the brand global, as well as retain its luxury heritage and make sure it remains relevant.
“I think that the last eight years have been just transformational for the brand,” Cheng said. “When we acquired Rosewood, we feel that there is significant potential with this brand, with all the DNA. But it was not present globally. And so the mission is really take the beautiful brand and make it a global, clearly recognized brand. And we’ve done that, and more, I think.”
Just this year, the company opened its flagship property in Hong Kong, where Cheng is based, and most recently, in March, a hotel in the heart of Bangkok. The newly opened Rosewood Hong Kong was “a project that was 10 years in the making” and, according to Cheng, “it’s the most comprehensive expression of the Rosewood brand and the vision of the Rosewood brand.”
When New World acquired Rosewood, it had only 20 properties; today it has 27 hotels and 21 more hotels in its pipeline. The group’s other brands also include lifestyle brand Khos, luxury Asia-based brand New World Hotels & Resorts, and neighborhood-lifestyle brand Pentahotels.
But beyond global expansion, Cheng said that what she’s most proud of in terms of achievements for the brand is the fact that it has changed how we look at luxury in the hotel space.
“I think what we’ve done in the last eight years is actually open the eyes of a lot of people that you can do luxury hotels differently,” Cheng said. “And I think that we have captured a space that is very unique and really is very different for us and for the market space.”
Rosewood’s ability to stand for luxury, as well as remain relevant as our concepts of luxury change, lies in the fact that each property is, in its own way, a stand-alone entity, she said. “Our DNA is sense of place, which means that every property is different. It has its own personality. It’s all about the location. And every Rosewood property is designed differently. It’s designed to reflect and to respect, to celebrate, the local culture. And so, when you go from one property [to] another, there is no cookie-cutter experience. And we need to maintain that, because that’s what our travelers are looking for. And that’s how we also differentiate ourselves from the enormous supply out there, the crowded space out there.”
Consumers and industry insiders have taken note. When iconic luxury hotel group Belmond put itself up for sale, Melissa Biggs Bradley, founder and CEO of luxury travel planning company Indagare Travel, said she hoped Rosewood would consider buying it; eventually luxury group LVMH did.
Biggs Bradley said at the time that Rosewood’s track record for “maintaining high-end properties and their distinct personalities and characteristics” and making sure their hotels are anything but “cookie-cutter” would be a relief to the luxury travel community. “I think that at the really high end, people are really allergic to this sense of sameness that happens at so many of the big, corporate five-star brands; they want that personality and they don’t just want to feel like a number on a revenue line,” she added.
But Cheng, however, doesn’t just want to repeat the same formula for the next eight years.
“In the future, we will need to continue to evolve and take it further, because I think the consumer behavior is changing, and they are looking for different components in hotels now.”
And what they’re looking for is essentially what the entire travel industry is trying to deliver to them: Experience. At Rosewood, however, it’s an experience no longer rooted in “extravagance” but rather one that’s more about “bringing in the city to the hotel.”
“When people come to Rosewood, they feel that they’re fully immersed in the cultural experience,” she explained. Furthermore, “travelers and consumers are appreciating more casual experience as well. So they don’t like the formality.”
That, she said, is what prompted Rosewood to launch its Khos lifestyle brand last year, which encapsulates a more community-driven model that “combines work and play and sits at an intersection between social club, co-working, and being a lifestyle hotel. I think that’s where the industry is heading.”
Khos was announced at the International Luxury Travel Mart in 2017 in Cannes, but since then Rosewood has stayed fairly mum about the new brand while it works on what Cheng described as “incubating and piloting some of its concepts.” The full launch, she said, is expected to come later his year by mid-summer.
In addition to co-working, Cheng said that Rosewood wants to look at how it can integrate retail and spa amenities into Khos, as well as possibly introduce some type of membership model.
“If you look at the whole ecosystem of the hotel, it has a lot of components that can serve a lot of people’s needs in their daily life. But in the past, no one has actually maximized the potential. Traditionally, it’s all just about people coming in. It’s the room. You stay over in the room. You use the restaurant, the meeting space, for events. That’s it. But now, I think it’s about building a community. People want to be connected. People don’t want to work in an office anymore. They don’t want to meet in the meeting room anymore. So, the behaviors of consumers are changing. And we need to change and re-look at the whole hotel real estate model to cater to that. And that’s what we are looking [at with] Khos’ launch, because of that.”
Rosewood as the Ultimate Experience Platform
Evolving Rosewood’s business strategy with changing consumer behaviors and developing it into something of a “facilitator” is a major goal for Cheng.
While some hospitality CEOs, like Hilton CEO Chris Nassetta, think it’s nearly impossible to own a customer, Cheng disagrees.
“I think that you can own a consumer. I think that it’s about how you position your brand and how you create this brand,” she said. “I think that there’s so many choices out there. And in order for consumers to be loyal to your brand, you almost have to make that brand desirable, in a sense that you want the consumers to choose a destination because there’s a Rosewood. That’s my vision. I want to be able to create brands that are irreplaceable. That’s forward thinking, that speaks the language of current consumers, continually evolving, that is not easily replicated.”
But unlike larger hotel companies like Marriott or Accor that are using loyalty programs in an effort to own more of the customer, Rosewood, she said, won’t play in that space.
“There are so many loyalty programs out there. One consumer can always switch to another loyalty system, for example,” she explained. “But a brand experience — if you do it right and you differentiate yourself well enough and you position yourself well enough — that’s hard to replicate. And the guests will always come back to us, for example, if we are able to get to a level where we create that desire and allow the consumers to choose our destinations because of us. Then that’s where we own the customer.”
Instead of a loyalty program, it’s customer recognition that works at the ultra-luxury level, she said, and she wishes the hospitality industry were as advanced as platforms like Amazon or Net-A-Porter in being able to recognize consumer preferences and better market to them.
Still, however, Cheng said, that doesn’t mean loyalty programs are on their way to extinction. “In the mass sector, the upper upscale, and upscale, I think that there will be consumers that still care about the points and that are looking [for] more value-add deals. And I still think that that will be an attractive proposition for them. However, I think there’s way too many programs out there. And so, to differentiate yourself from an Accor to a Marriott to others, you need to do things differently.”
It’s for this reason, she said, Rosewood invests so heavily in its marketing, operations, and technology to ensure consistency but to also maintain quality and to be “thoughtful” and “intuitive.” Cheng added that the company is working on a customer relationship management (CRM) program that employs data to better understand Rosewood’s consumers.
“We are developing Rosewood to be a desirable brand that can influence consumers’ purchasing decision,” she added, so that it can “be more than just a hotel brand. It can be a brand that everyone wants to be associated with, whether it’s retail, whether it’s another industry. And then you become the center point that links everything together. That’s the potential. And that’s the power of the brand. And so that’s where we are focusing on.”
And although Rosewood may not possess the scale of a Marriott or an Accor — the two hotel companies that have the largest concentration of luxury hotels worldwide — that consolidation helps Rosewood, Cheng said.
“I think that the consolidation, actually, to me, is beneficial for brands like Rosewood, because the consumers that we’re targeting are people who want bespoke experiences. They want tailored experiences in their hotels. They don’t necessarily want to stay because, ‘I have points for redemption.’ So, I think we’re talking about two completely different categories of customers.”
She continued, “The more they consolidate, the more Rosewood will stand out, in my opinion. And whether these consolidations will create that end-to-end experience, I think that it’s not going to be easy. And, again, I think the target customer’s just completely different from [ours].”
Cheng also thinks the hotel industry as a whole needs to force itself to be more innovative.
“I think hotel brands need to be pushed,” she said. “I think that there are different companies, hotel companies are rolling out different brands out there. But I’m not sure they’re actually innovative. I think a lot of them are just rolling brands for the sake of issuing brands out so that they can get more management contracts. We have a different philosophy. We launch a brand because we know there’s a white space and we want to capture that white space and we want to push the hotel industry to a different level.”
Skift Editor’s Note: This article was updated to reflect that the Rosewood Bangkok opened in March, not April, and that Rosewood has 27 hotels in operation and 21 in the pipeline.
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Photo credit: Rosewood Hotel Group CEO Sonia Cheng has big plans for expanding her company's four brands. Rosewood Hotel Group