Highgate, the second-largest U.S. hotel management company after Marriott, manages over 560 hotels with about 86,000 rooms. Most of the rooms are select-service roadside and full-service urban properties, giving Highgate a snapshot of how the business travel recovery is progressing. The company has also expanded into luxury properties by acquiring Viceroy Hotels & Resorts and a leisure portfolio in Portugal. Ankur Randev, the chief commercial officer, provided an update on Highgate’s performance, highlighting the strength of New York City’s business travel demand, with recovery expected to be almost complete by the end of the year, and the weakness in San Francisco due to safety perceptions and tech workers not fully returning to offices.
Highgate has 19 hotels in Hawaii, which have been impacted by the slow return of Japanese travelers due to currency fluctuations. However, North American travelers have helped make up for the lack of Asian visitors in Hawaii. The company has adjusted its sales tactics, focusing more on local account servicing and negotiations rather than regional approaches, to increase conversion and penetration. Additionally, rather than solely negotiating lower hotel rates, Highgate is focusing on targeting accounts with the potential for the largest lifetime value and adapting to the changing dynamics of corporate travel budgets post-pandemic.
Corporate travel budgets face a post-pandemic reckoning as companies navigate increased attendance at in-person events. Highgate has been working to court accounts with the largest lifetime value rather than focusing on one-off sales and quick wins. Travel managers at high-value corporate clients are increasingly interested in sustainability efforts, such as reducing carbon emissions from hotel stays. Highgate’s vice president of sustainability ensures the company can provide the necessary data for clients to stay in compliance with their sustainability goals.
Despite potential market softening or recession, Highgate remains optimistic for its future, citing confidence in its revenue management capabilities and commercial strategies. The company has heavily invested in technology and standardized best practices across its portfolio since appointing Arash Azarbarzin as CEO in 2021. The accommodations sector stock index performance year-to-date reflects the overall performance of hotels and short-term rental sector stocks within the ST200, providing a comprehensive view of the financial performance of nearly 200 travel companies worth over a trillion dollars in global markets.
