Highgate and The Kessler Collection announced the formation of a strategic alliance in November that included the creation of the Kessler Hospitality division within Highgate and the addition of several properties to the latter’s management portfolio. The collaboration positions The Kessler Collection to scale its growth using Highgate’s revenue management strategies and experience in the lifestyle and luxury segment. Likewise, the alliance enables Highgate to expand its footprint by entering new markets.
The relationship between Highgate Principal Richard Russo and Kessler Collection President Mark Kessler dates back many years, as their careers briefly overlapped at Ernst & Young. The two reconnected in 2024 when they were on a trip to Mexico. They were both meeting with business partners, and the duo started talking about how they could potentially benefit from working together. Kessler noted that the company considered how to grow its brand and increase the profitability of its assets, and it had been considering an alliance in recent years. This process led to his conversation with Russo. “We talked about what Highgate provides for others in the industry, and I told him what we’re looking for in growth,” Kessler told LODGING. “We … looked at other companies that might be a good fit, and we felt like Highgate was a great partner for this strategic alliance and felt like they could bring something to the table to help us grow and also increase the profitability of our assets through their scale and size. It’s exciting that we have this alliance where we can grow, and both expand our management and brand footprints.”
Likewise, Russo recalled how, in his initial conversations with Kessler, they explored how a partnership could help The Kessler Collection grow. He explained how its growth had been “impeded” by spending time on tedious aspects of operations, such as accounting systems or insurance meetings, whereas an alliance would be beneficial because Highgate could assist The Kessler Collection with its resources. “Highgate, given its scale and its resources, is already doing that for hundreds of hotels,” he said. “We already have those resources, those systems, those processes in place that we could offload what he has to do daily.”
The alliance will help Highgate continue to scale its growth by entering new markets, and with the formation of the Kessler Hospitality division, they will come prepared with a “ready-made team” they can leverage, Russo explained. The division consists of a group within Highate that is focused on the Kessler assets that the company now manages and represents the culture that The Kessler Collection has established. Additionally, Russo stated that “cross-pollination” between the companies has allowed their employees to advance their careers by pursuing newly available opportunities due to the expanded scale that’s a product of the collaboration.
Kessler emphasized that one of the key goals of the alliance is increasing profitability across its assets, and the Highgate team’s experience in revenue management, along with its scale and buying power, are substantial assets. He also reiterated that the Kessler Hospitality division is an appealing aspect of the partnership, as it combines Kessler employees who moved over to Highgate with the expertise of the latter company’s senior team and, in the process, blends the models that have proven to be successful for both organizations.
Prioritizing Growth
This year will mark the first full year for the alliance, and Highgate intends to drive performance at the hotels in its portfolio. Russo stated that the company’s buying power and especially its technology are powerful tools in its aim to do so. “What Highgate’s able to do on the technology side is very unique and different from most of our competitors because we heavily invest in many different technological platforms,” he explained. “It will allow us to drive differentiated performance.” Russo emphasized that growth is another priority, as he recalled how he and the Kessler team are already seeing opportunities to explore new markets. By working together, Russo described how the field of assessable properties has grown substantially, and Highgate has more branding possibilities available, as the company can approach other hotels with a “different lens” and convert them into a Grand Bohemian.
Likewise, Kessler stated that the relationship will help The Kessler Collection find deals that they hadn’t had access to before, and the team can prioritize its efforts on growing the company’s brand because Highgate will help lessen the strain on the operational side. When asked for a specific measure of success for the alliance in the next 12 months, he named adding two properties to the portfolio per year and, in doing so, increasing profitability as a clear goal.
Strengthening the Kessler brand is another focus as well. “When we started this search and talking to Highgate, our goals were portfolio growth; focus on our brand, both the storytelling and the extension of our brand; the Grand Bohemian brand; and profitability,” Kessler said. “Financial profitability is number one. Number two, portfolio growth. When we sat down with Rich and sat down with others to talk about what success looks like for us, portfolio growth is important. Highgate knows how we operate now, and they know that they can execute on our vision. And so if they find a deal that works for us, we can execute on that vision together.”
From Highgate’s perspective, the success of the alliance will be measured through some of the same criteria used by many in the hospitality business—ensuring that it benefits hotel owners, employees, and guests, while also delivering a quality product. “Ultimately, what we want is that the owners of the hotels are happy with our performance, the employees are going to work happier than they would have the day before, and that we’re creating a good product that we can then scale into new and interesting markets,” Russo said. “We want to deliver positively for our owners, for our employees, and our guests.”
