Highgate Adapts Strategy Amid Uneven Business Travel Recovery

16.08.2024 - 22:10 / skift.com / Sean Oneill

Highgate manages over 560 hotels with about 86,000 rooms, claiming to be the second-largest U.S. hotel management company after Marriott.

Most of the manager’s 86,000 rooms are select-service roadside and full-service urban properties. So Highgate can serve as something of a proxy for how the recovery in business travel is progressing, mirroring what its close rivals Marriott, Aimbridge Hospitality, and MCR Hotels are seeing.

Highgate also runs luxury properties: It bought lifestyle brand Viceroy Hotels & Resorts in late 2022, and expanded into Europe last year by acquiring a leisure portfolio of almost 3,000 rooms in Portugal.

Skift got an update on Highgate’s performance from Ankur Randev, chief commercial officer.

Highgate says it’s the largest hotel operator in New York City, with about 35 hotels. Randev says the city’s business travel demand is in good shape.

“We see some gap in the volume, but it’s already at 95% of 2019 levels,” Randev said. “We expect a full recovery next year if not by the end of this year.”

San Francisco hotels are underperforming due to perceptions of a lack of safety, many workers in the tech industry only partly returning to offices, and convention losses to Las Vegas. But Randev said some of the “ground-level realities” that had been discouraging visitation to San Francisco are “improving on a daily basis.”

Highgate has 19 hotels in Hawaii.

“The market has been impacted by the slow return of Japanese travelers, who historically made up about half of international visitors, because of the weakness of the yen to the dollar,” Randev said.

However, North American travelers have largely made up for the lack of Asian visitors in Hawaii.

Highgate has recently been emphasizing account servicing and negotiations at the local level rather than talking at the regional level.

“We’ve realized that locally negotiated is key,” Randev said. If a company has a lot of its employees visiting a market, we definitely want to have one of our people talking to their local travel manager at all times.

“We continue to get business from the big spending corporates naturally through usual channels like travel management companies. But for all the other players, which make up a majority of business travel by company count, we’ve created a robust playbook on backyard, or local, servicing of accounts that’s really helped in conversion and penetration.”

Corporate travel budgets face a post-pandemic reckoning. With attendance at in-person events surging, companies must balance cost control and employee demand.

Highgate has been trying to court accounts with potentially the largest lifetime value rather than producing a series of one-off sales that may be quick wins.

Randev said the old strategy of