Context is All

Judith Davidsen -- Interior Design, 10/1/2009 12:00:00 AM

From July 2008 through June of this year, the 75 Interior Design Giants in hospitality earned $508,635,813, down 14 percent from the previous year. This may not sound all that great, but it's actually quite a performance when you consider that those particular 12 months contained two quarters—the fourth of 2008 and the first of 2009—that even Austan Goolsbee, chief economist of the President's Economic Recovery Advisory Board, called "epically bad." Many Giant projects were canceled or postponed at the height of the crisis, but more were ultimately won over the course of the year: 183 hotels lost, for instance, but 257 gained; 105 restaurants, bars, and nightclubs lost but 257 also gained; five cruise ships gained with no losses. Even more surprising: While it would not have been entirely unreasonable to expect the bulk of "hospitality" projects to have been low-rent corner bars, devoted to the drowning of fears and sorrows, it was in fact hotels that rose 3 points to account for 59 percent of Giant income, bearing out the belief of one Giant that "there is plenty of pent-up demand" for business trips and vacations. Almost a third of the Giants also worked on health-care projects featuring hospitality components.

Work outside the U.S. rose 47 percent, and almost half the Giants believe that foreign countries offer the best prospects over the next two years, specifically China, India, and the Middle East—not including the United Arab Emirates, which topped the list until Dubayy's spectacular tumble. The Caribbean, which came in third last year, is barely on the Giants' radar now. In the U.S., the South is felt to have the greatest potential, followed by the Northeast, West, and Midwest. Mid-price and economy properties offer the greatest promise, condo hotels and time shares the least.

Over the past year, staffing contracted 15 percent, with designer positions down 17, project managers and directors 11, and other design staff 34. The only staff category to grow was principal/partner, up 13 percent. For this group, the median salary remained the same, while billing rates slid 6 percent. Project-manager salaries went up 3 percent, as billing rates dropped 2 percent. Designer salaries fell 2.7 percent, but billing rates rose 5.9 percent.

The proportion of sustainable projects rose from 27 to 32 percent, with 10 Giants reporting that 75 percent or more of projects filled the bill and, conversely, five firms doing no green work at all. Although eight Giants say that eco-minded choices tend to be client-driven, 22 firms try to convince stragglers by letting the products do the talking. Six firms make the cost-benefits argument. One firm has a scare-tactic approach: "We explain to clients that, if they don't go green, they risk being out of sync with the industry by the time their project is built."

When Giants are dealing with manufacturers, the economy seemed to aggravate some problems. They mainly appear to boil down to efficiency: faster deliveries and responses and more thorough and easily accessed product profiles, especially improved online images for client presentations. One Giant suggested that, given the decrease in sales reps, cut sheets with complete information could be a great time-saver. Time, of course, being money.

The Rockwell Group designed Nobu at Atlantis the Palm in Dubayy, United Arab Emirates.

The conference center at Chicago's Hotel Sax is by VOA Associates.

From top: The Four Seasons Hotel St. Louis is by BraytonHughes Design Studios. Stonehill & Taylor Architects and Planners designed the New Yorker Hotel.

Skidmore, Owings & Merrill's Messilah Beach Hotel has broken ground in Kuwait.