Arash Azarbarzin, the CEO of Highgate, knows struggle. He was an immigrant of necessity, having sought political asylum in the U.S. amid the turmoil and bloodshed of the Iranian revolution, which lasted for more than a year and culminated in 1979 with the institution of the Islamic Republic of Iran.
It’s not surprising, then, that though revenue and profit matter for the real estate investment and hospitality management company, which has a portfolio numbering more than 550 hotels, people come first. “Talent is the foundation of our company,” Azarbarzin told HOTELS, his own story one built on hard work and dedication, “the American dream,” as he put it.
His and Highgate’s focus on its employees is the idea behind the company’s “People First” employee initiative, which has succeeded in reducing its attrition rate to 23.2%, a percentage that is substantially low for a traditionally peripatetic industry. “People are happy being here because we have created an environment of collaboration,” Azarbarzin said.
In order to achieve less turnover and opportunity, Highgate has implemented what it calls its LMS, or learning management system, aimed at line staff all the way up to VPs and beyond that allows them to track their professional growth and helps them succeed toward achieving the next rung up. Highgate also has a partnership with Cornell, wherein employees can take classes and gain certification. “It’s about having an understanding that there’s a future for them and my job as CEO is to make sure they get there,” Azarbarzin said.
It’s something Azarbarzin has done in spades in his own life. Like many a story in the hospitality industry, he started his career at the bottom, washing dishes, a kitchen factotum. He was simultaneously studying computer science and side hustling as a prep cook and a power washer. He eventually made it up to becoming a sous chef, but at the hotel he was working at, he began to spend more time in the front of the house. His vigor caught the eye of the hotel’s owner, who said, “I’d like to pay you to be a manager, rather than a cook,” Azarbarzin recounted.
From there, it was a sprint up the luxury ladder. He started with Four Seasons, before moving on to management roles with Starwood Hotels & Resorts. In 2005, he became president of SBE’s hotel group, the company headed by Sam Nazarian, a mentor who he said made him look at the world through a different lens. (Azarbarzin even had a two-episode run on the widely popular reality dramedy “The Hills,” when it featured some scenes at the Sahara Hotel in Las Vegas.)
At SBE for 12 years, he eventually became CEO of SH Hotels & Resorts, a hotel operating platform owned by Starwood Capital and headed by hospitality guru Barry Sternlicht, of whom Azarbarzin said, “I’ve never seen anyone in the business who works so well with his left brain and his right brain.” He calls him “a creative genius,” someone who is at similar ease discussing design briefs or plant varietals. “He knows exactly what he wants.”
Mentors matter. So much that Azarbarzin calls himself a poster child for what mentors can do. It’s a big part of the focus of LMS, whereby leaders are assigned mentees and success is measured as an outcome for each. In 2022, Highgate made 56 operational promotions and 46 corporate promotions.
Highgate Hotels was founded in 1989 by brothers Mahmood and Mehdi Khimji. (Azarbarzin likens Sternlicht to Mahmood—someone who is as laser focused and energized on design and people as he is on investment returns.) It rapidly grew as a premier owner and operator of hospitality assets and today is one of the largest operators of real estate in New York. Azarbarzin joined Highgate in 2021, going from a company in SH that managed just over 12 hotels to one that has some 87,000 rooms under its management belt, with a huge concentration in the select-service segment—more than 300, to be exact. Those are led by Robb Dann, COO of Highgate Select, and that helps take a lot of pressure off of Azarbarzin (there are also four EVPs with oversight over specific regions), who is freed up to be more of a people CEO. “I’m fortunate to be able to touch more people and more assets and have more resources available because we’re such a bigger company,” he said.
The hotel industry over the years has become more and more professionalized, a playground for institutional investors and mammoth management companies. Over time, companies have become more specialized and circumscribed in their business focus. Brand companies turned asset light, alighting from real estate ownership, while third-party management companies stepped in to fill an operational void.
Highgate has bucked that trend—one of only a handful of large firms that own and manage assets. Azarbarzin said it gives them a perspective that others don’t have. “We put our money where our mouth is,” he said. “When we do reports and marketing plans, different things that we put together for a hotel, we always look at it from an owner’s eye and our owners appreciate that.”
Owning things is not going away for Highgate. Azarbarzin said that the company would likely grow asset to asset rather than by acquiring other management companies, but it did make a large splash on the brand front when it announced it was acquiring Viceroy Hotels & Resorts in December. The deal is likely to close in the next 30 days and, though not in name, it’s effectively Highgate buying Viceroy’s 10 current management contracts, with the aim to grow the brand in urban gateway markets and resort destinations.
Azarbarzin indirectly has ties to Viceroy. For 10 months, he was president of Proper Hospitality, a company founded by Brad Korzen, who founded Viceroy in 2000 and was CEO before it was sold in 2012. Because of that, Azarbarzin said, he’s been following that company for some time.
“We didn’t wake up one morning and say, ‘Let’s go find a brand to buy.’ We saw an opportunity where we can add value to a brand that has not seen the growth that it should have for many reasons,” he said.
It’s early, but expectations are that current Highgate assets could be converted to the Viceroy brand. “Our hope is to add value and, most importantly, scale it,” Azarbarzin said. “With our resources and capital partners, we clearly have a path to grow the platform.”