SAN FRANCISCO — Having a business in its 40th year may feel complete for some. For Sage Hospitality Group, it's "just getting started," according to Daniel del Olmo, the company's president of hotels and restaurants.

Zack Neumeyer, co-founder and chairman of the board, has once said in a statement that he views Sage as a "40-year-old startup with the courage to innovate and embrace societal and market change built on an extraordinary team."

Sage is a hospitality development, management and investment company based in Denver.

"I smile because it is 1,000% true for as long as I have been with the organization and the several decades leading up to it," del Olmo said in an interview with HNN at the 2023 Indie Lodging Congress in San Francisco. "It's always been a high-entrepreneurial environment where we see our [general managers], both from a hotels side and restaurant side, as CEOs of the business. We allow them the latitude to lead."

Sage Hospitality is hosting a leadership festival this year to celebrate its 40 years in business with the theme of "We're Just Getting Started." Del Olmo said the energy and enthusiasm that co-founders Neumeyer and Walter Isenberg have for the company's momentum is just as strong today.

"This year, as we close out the year, will likely be from a corporate financial perspective the absolute record year in the history of 40 years in terms of [earnings before interest, taxes, depreciation and amortization] contribution," del Olmo added.

It's not just about the money, though. It's also about the company's greater purpose of what it's doing to enrich the lives of its associates, guests, investors and partners.

Del Olmo said that's a reason why many of Sage's partners over the past couple of decades have grown with it instead of choosing another path.

Though del Olmo has only been with the company since 2020, he's seen how much Sage has refined its purpose and vision.

"When I joined January 2020, the world was a very different place. We had an opportunity to essentially reset as part of the five-year strategic plan that we developed," he said. "Strategy really is mostly about what you choose not to do versus what you do. Every opportunity that we had to grow, either investing in hotels or restaurants or taking over, for every five opportunities we only considered one. We've been much more focused as an organization.

"We've put out the notion that we are the experts in experiential business versus the commodity businesses."

Sage just completed its annual associate engagement survey across its more than 120 hotels, restaurants, bars and venues. It achieved an 84% participation rate and a 79% engagement score along with a 4.2 Glassdoor score.

"What I am very proud of is despite the fact we are still as an organization, and frankly as an industry, rebuilding our teams, continuing to deliver against the heightened expectations of our guests as a result of the inflationary pressure on [average daily rate]," he said.

By year end, Sage is projected to surpass $1 billion in 2023 systemwide revenues for the first time in the company's history. This represents year-over-year growth of about 22%.

Much of that has come as a result of the infrastructure that Sage has built over the past couple of years, del Olmo said. Sage's headquarters now has about 180 people that support the portfolio.

"We, as a result of the pandemic, rebuilt and [brought in] subject matter experts and talented leaders from other organizations that we respect," he said.

Sage's current pipeline of hotel projects, including new-build and existing hotels, stands at 45. All of these projects will be independent luxury and lifestyle.

On its restaurant side, Sage has continued to open new concepts in its portfolio.

Looking ahead, hotel RevPAR growth in 2024 is expected to be around 5% to 6% across Sage's portfolio, del Olmo said.

"We're taking a more cautious approach as we present our budgets to our partners. Of the 60 or so hotels that we manage, we have an ownership stake in about one-third of then. So when we look at any opportunity, we always think like owners and act like partners," he said. "We believe that there is a recession that is likely; we do believe the recession, while likely not a meaningful size, we still believe there's going to have some impact, typically in the first part of the year."

Del Olmo expects a strong group base going into 2024, similar to what was seen this year. Business travel, however, is still not where it was in 2019.

"We've had to focus on restrengthening our relationships and our focus on small- and mid-sized companies," he said. "The interesting part about leisure is we do believe that in several of the markets that we serve that international travel will come back."

Leisure was softer in the summer as a result of many Americans going to Europe. Sage believes that will revert in the new year.

"We're going to see, we believe, a better summer season next year both in the international segment as well as some of the domestic segment coming back," he added.

What keeps del Olmo up at night is labor costs.

"I think everybody is concerned about that. One way to combat that is to have a strong culture that equates to above-average industry retention rates, coupled with some innovative programs that we've put in place that have allowed us to attract talent," he said.

For instance, several of Sage's Denver hotels allow associates to work a four-day workweek. That resulted in a spike in retention and attracting new talent.

Sage is rolling out a company-wide labor management solution that allows every hotel and restaurant team to manage labor in the most efficient and cost-effective way possible.

"Similar to the restaurant business that is a penny-profit business, the hotel business today you have to manage it in the same exact way because there's so much pressure on the margin," he added.

In light of industry strikes across the country, del Olmo said it's critical for leadership to listen to its employees and set them up for success. Then it's about rewarding and recognizing them accordingly.

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