Highgate, a leading U.S. hotel management company, is honing its strategies in response to the inconsistent rebound of business travel. With a portfolio of over 560 hotels, the company is adapting to market shifts, focusing particularly on local account servicing.
New York City is witnessing a robust recovery in business travel, whereas San Francisco grapples with challenges. Meanwhile, Hawaii faces a mixed recovery, affected by the decreased presence of Japanese visitors. Highgate is strategically adjusting its approach to capture long-term client value amid evolving corporate travel budgets and sustainability needs.
Strength in New York City
Highgate, the largest hotel operator in New York City, runs approximately 35 hotels and observes a robust recovery in business travel demands. “We see some gap in the volume, but it’s already at 95% of 2019 levels,” said Chief Commercial Officer Ankur Randev. Projections suggest a complete recovery by the end of this year or early next year.
Challenges in San Francisco
San Francisco’s hospitality sector struggles due to safety concerns and a decreased tech industry presence, impacting hotel performance. Additionally, convention activity has shifted to Las Vegas, affecting local demand.
However, Highgate remains optimistic as improvements in conditions are noted. Randev mentions that some ground-level challenges are improving daily, which may aid recovery.
Mixed Outlook in Hawaii
In Hawaii, Highgate manages 19 hotels.
The market faces challenges due to the slow return of Japanese visitors, historically constituting half of international arrivals. The weak yen against the dollar exacerbates this issue.
Conversely, the influx of North American guests has partly compensated for the deficit, maintaining a degree of balance in the market dynamics.
Innovative Sales Tactics
Highgate shifts its sales strategy, accentuating local account servicing over regional negotiations. Randev stresses the importance of engaging with local travel managers to enhance business conversion and account penetration.
By establishing a robust playbook for local servicing, Highgate aims to fortify its relationship with clients and secure steady business inflow.
Focusing on Lifetime Value
Amidst evolving corporate travel budgets, Highgate is prioritising lifetime value over short-term gains. The company is realigning its approach, moving away from conventional low-rate negotiations to building long-term client relationships.
Randev notes that businesses are adopting stricter compliance policies, shifting the focus to potential lifetime value instead of immediate outcomes.
Sustainability Takes Centre Stage
Corporate clients increasingly seek to fulfil sustainability targets, prompting a demand for data on carbon emissions related to hotel stays. Highgate’s vice president of sustainability ensures the provision of such data to assist clients in meeting these goals.
This facet of operations aligns with broader trends in travel management, where compliance with carbon reduction plans becomes essential.
Optimism for Future Prospects
Randev is confident in Highgate’s preparedness to face potential economic downturns due to their strategic revenue management and commercial tactics.
The company’s investment in technology and standardisation of practices since 2021 bolsters their capabilities in navigating market challenges.
Highgate’s adaptive strategies amidst the uneven recovery of business travel underscore its commitment to resilience and client-focused innovation. By leveraging local engagement, focusing on long-term value, and aligning with sustainability goals, the company is poised to navigate current challenges and capture emerging opportunities.